qld report on health act 1937 (hairdressing & skin - ncp
TRANSCRIPT
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
i
Contents
Executive Summary i
1. Introduction 1
2. The Public Benefit Test Process 3
3. The Existing Legislation 6
4. Market Structure 10
5. Public Health Risk Assessment 23
6. Public Health Costs 39
7. Assessment of the Existing Legislation (Base Case) 48
8. Assessment of Reform Options 62
9. Experience in Other Jurisdictions 95
10. Conclusions 97
Appendix A - Summary of Submissions A-1
Appendix B - Legislative Extracts B-1
Appendix C - Impact Statement Matrix C-1
Appendix D - Experience in Other States D-1
Appendix E - Disease Costing Calculations E-1
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
ii
Document History and Status
Issue Rev. Issued To Qty Date Reviewed Approved
Printed: 2 September 1999 6:50
Last Saved: 20 November 2009 1:28 PM
File Name: \\SKM-BRIS1\VOL1\Plen\WP\Reed\ECON Jobs\Re02006\Finals\RE02006 Final Health
Approved.doc
Project Manager: Alain Pillay
Name of
Organisation:
Queensland Health
Name of Project: Review of the Hairdressing, Beauty Therapy and Skin
Penetration Legislation
Name of Document: Public Benefit Test Report
Document Version:
Job Number: RE02006
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
i
Executive Summary
Introduction
No modern society is wealthy enough to eliminate the
societal risk arising from all infectious conditions
and/or communicable diseases. As a result, all governments
across the world have made judgements (either explicitly
or implicitly) regarding the acceptable level of risk to
the public arising from various activities and the degree
to which legislation can minimise those risks.
In the case of hairdressing, beauty therapy and skin
penetrating activities, societal health risk management is
implemented through Parts 5 and 15 of the Health
Regulation 1996.
The purpose of this report is to set out the findings of
the public benefit test assessment into the restrictions
imposed on participants undertaking activities within the
hairdressing, beauty therapy and skin penetration
industries (e.g. tattooing, body piercing and
acupuncture).
The identification of the causal factors influencing the
transmission of diseases has proven that regulatory
measures based on broad industry classifications are
unwieldy and inappropriate. Mechanisms to minimise
infectious conditions or communicable disease transmission
from hairdressing, beauty therapy and skin penetration
services should focus on the individual activities in
question.
Definitions
The following definitions were used to assist in the
identification and classification of activities during the
risk assessment process and have been formed through a
consensus opinion of what should be captured by any
legislation seeking to minimise the risks associated with
these types of activities.
Skin Penetrating Activities - Any activity involving the
piercing, cutting, puncturing, tearing or shaving of the
skin, mucous membrane or conjunctiva of the eye.
Non Skin Penetrating Activities - Any activity that does
not fall into the category of skin penetrating activities.
For the purposes of this study, “risk” has been defined as
the potential exposure of the community to the possibility
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
ii
of harm arising from infectious conditions/communicable
diseases.
Higher Risk Activities - Any risk activity that causes
blood or other body fluid to be released as a consequence
of its operation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
iii
Moderate Risk Activities -
Any Activity that:
Has the potential to cause blood or other body fluid to
be released accidentally; or
Results in such small quantities of blood or body fluid
being released that a lower to moderate risk exists; or
As a result of the equipment being used, mitigates the
risk of contamination arising from the activity being
undertaken.
Lower Risk Activities - Any activity that does not cause
blood or other body fluid to be released as a result of
its execution but may still create the opportunity for the
transmission of infectious conditions or communicable
diseases through inappropriate infection control
practices.
No Risk Activities - Any activity that effectively
generates no material1 risk of infectious conditions or
communicable disease transmission.
The following definitions of non-skin penetrating
activities were utilised to define the scope of the
project:
Hairdressing - The cutting, styling or undertaking of any
similar activity involving facial or scalp hair for the
purposes of maintaining or enhancing a person‟s
appearance.
Beauty Therapy - The provision of any non-skin penetrating
service (excluding hairdressing) for the purpose of
enhancing a person‟s appearance (e.g. use of cosmetics).
It should be noted that the activity based approach to the
study makes the definitions of particular industries
redundant for the purposes of establishing a new
legislative model. This approach was designed to
facilitate the identification of services provided by
existing participants. This was done by adopting non-
prescriptive definitions based on specific tasks or
functions which enables demarcation based on activity. It
is recognised that, in practice, some participants in
these industries undertake activities that span across
these definitions.
1 For the purposes of this study, materiality was deemed to mean the risk of any
activity causing the transmission of those diseases which could in all
likelihood be transmitted through blood and result in severe sickness or death.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
iv
The Public Benefit Test Process
The governing principle underlying any legislative review
is that any legislative restrictions on competitive
behaviour shall be removed unless it can be shown that:
the benefits of the restriction to the community as a
whole, outweigh the costs of the restriction; and
the objectives of the legislation can only be achieved
by restricting competition.
In order to answer these questions, a Public Benefit Test
(PBT) was undertaken to assess the cost-effectiveness of
the hairdressing, beauty therapy and skin penetration
regulations of the Health Act 1937.
In undertaking a PBT, Queensland Treasury Guidelines2
stipulate a number of key tasks that should be completed.
These are:
clarify the objectives of the legislation;
identify the nature of the restriction;
analyse the likely effect of the restriction on
competition and on the economy generally;
assess and balance the costs and benefits of the
restriction; and
consider any alternative means for achieving the same
result, including non-legislative approaches.
The project‟s methodology embodies these fundamental
requirements and extended the analysis to incorporate an
assessment of risk to clients, operators and the broader
community. This was undertaken in order to identify the
relative effectiveness of the alternative models under
consideration.
The project was completed in two primary stages:
Risk Assessment; and
The Public Benefit Test Process.
The risk assessment stage resulted in the production of a
separate risk assessment report which forms the foundation
for the analysis contained in this report. A copy of the
risk assessment report is provided under a separate cover.
2 Queensland Treasury - Public Benefit Test Guidelines, 1994
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
v
The Existing Legislation
The current legislation administered by Queensland Health
consists of:
Health Act 1937; and
Health Regulation 1996.
Sections 33 and 100A of the Health Act 1937 enables Parts
5 and 15 of the Health Regulation 1996 respectively. These
parts of the Health Regulation 1996 have the following
effect on participants within the hairdressing, beauty
therapy and skin penetration industries:
requires the licensing/registration of premises at
which hairdressing, beauty therapy and skin penetration
activities are conducted, as well as the licensing of
mobile hairdressing operators;
prescribes the means of cleaning, disinfecting and
sterilising equipment and items used in the conduct of
these businesses;
prescribes the minimum hygiene standards for the
conduct of affected business activities; and
sets minimum building standards for premises.
The objectives of Queensland Health‟s Public Health
Program are to:
reduce levels of preventable morbidity and mortality
resulting from disease and injury; and
create social and physical environments that support
and enhance health.
The objective of the current hairdressing, beauty therapy
and skin penetration legislation is to support these broad
corporate objectives by preventing the transmission of
disease and infection from these activities.
The proposed objective of the new legislation will be to
minimise the risk of infection and the transmission of
disease from the activities undertaken in hairdressing,
beauty therapy and skin penetration activities.3
3 Queensland Health Discussion Paper - Review of Hairdressing, Beauty Therapy &
Skin Penetration Legislation, 1998
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
vi
Other Jurisdictions
Hairdressing has been, and remains subject to public
health regulation by most health authorities through the
application of premises‟ licensing or registrations and/or
regulations about health related standards.
Generally, skin penetration has not historically been the
subject of occupational regulation, or “operator” based
regulation, although it has been the subject of premises‟
regulation and legislation about health related standards.
Currently, the type and extent of the regulation of
hairdressing and skin penetration activities across the
States and Territories varies considerably. Some
jurisdictions have commenced, or will soon commence,
National Competition Policy (NCP) reviews of their
regulation of the hairdressing, beauty therapy and skin
penetration industries.
The ACT and Tasmania have recently enacted new public
health legislation with schemes for the regulation of
certain activities categorised as “public health risk
activities”. The legislation in these States is similar
in that it addresses and regulates certain activities (on
a public health risk basis) rather than businesses or
occupations.
In Tasmania, in determining an application for licence,
the applicant‟s competency to undertake the activity in
accordance with relevant guidelines is considered. If so
declared by public notice, operators may also have to
register their premises. Separate guidelines have been
issued in respect of the activities of ear and body
piercing, tattooing and acupuncture. These require
registration of premises with local government; compliance
with infection control and related measures.
Market Structure
There are a number of participants that are affected by
the hairdressing, beauty therapy and skin penetration
legislation, as identified in Table E.1. Due to the
diversity and mobility of stakeholders, accurate data on
the number of participants and the extent of consumption
of services is difficult to obtain.
Table E.1: Key Stakeholders Operators (i.e. hairdressers,
beauty therapists, tattooists,
Consumers
Queensland Health
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
vii
acupuncturists, body piercers
etc.) conducting their activities
from fixed premises.
Local Authorities
Mobile operators Health Professionals
(registered/unregistered)
Unregistered practitioners Other Government Departments
The requirement for licensing/registration of
participants/premises represents a restriction on
potential entrants into the market. In addition, the
requirement to build structures in accordance with
specified construction standards could act as a potential
barrier to entry and reflects a restriction on
participant’s competitive conduct.
These restrictions impose additional transaction costs on
some participants; increasing their cost structures and
limiting their competitive position relative to other
operators (e.g. medical practitioners) undertaking the
same activities in the conduct of the profession.
The restrictions placed upon competition and employment
within the affected activities not only reduce the scope
of services provided but are also potentially
discriminatory in nature.
The underlying questions are therefore:
whether the current legislation is effective in
minimising the risk of disease or infection
transmission;
whether the costs of the legislative restrictions
outweigh the benefits to the community; and
whether there are any more cost-effective alternatives
to achieve the same or better outcomes.
Risk Assessment
Given that the primary objective of the existing
legislation is to minimise the risk of infection from the
activities associated with the hairdressing, beauty
therapy and skin penetration industries, the primary
benefit to the public would arise from the cost-effective
control of these risks.
A key finding of the risk assessment was the formal
recognition that different activities give rise to
different risks. Any legislation that intends to minimise
the risk associated with infectious conditions and
communicable diseases should therefore focus on the
activities that give rise to those risks.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
viii
The profile of activities and risks developed for this
report indicates that the major risks to public health lie
with blood borne diseases and therefore those activities
that are bloodletting in nature. The risk assessment
found that the premises of any given operator are not
directly relevant to preventing the transmission of
infectious conditions/communicable diseases arising from
activities undertaken in the industries subject of this
study.
This outcome was reinforced in the cost benefit assessment
which found that there was not a net public benefit from
the maintenance of the existing hairdressing, beauty
therapy and skin penetration legislation.
The risk assessment concluded that moderate risk
activities were those activities that give rise to
potential body fluid exposure through the accidental
actions of the operator. Thus, they do not generate the
same level of risks associated with higher risk activities
that generate body fluid exposure as a consequence (i.e.
unavoidable result) of their activities. However, the
report also recognised that higher risk activities could
be undertaken in a manner that mitigates the risk of
transmission.
Higher risk activities, e.g. body piercing (excluding
closed gun piercing), tattooing and hair implantation are
activities likely to generate significant health risks to
the community.
A major issue facing operators and consumers of
hairdressing, beauty therapy and skin penetration services
is the information asymmetry that exists between those who
are aware and those that are not aware of infection risks
and what constitutes appropriate control practices, and
those that do not have the knowledge and/or awareness. 4
For the purposes of classification, Queensland Health
considered whether the disease or condition was acute,
chronic, whether it imposed financial costs on society and
the social/emotional costs of contracting the disease or
condition.5 A list of probable diseases/infectious
conditions that could arise from the industries are shown
in Table E.2.
The risk assessment found that the current regulation‟s
effectiveness in addressing the potential infectious
conditions/communicable diseases arising from the
4 Refer to the Risk Report
5 Communicable Diseases Unit, Queensland Health - Ranking of
diseases/conditions in health & beauty industry, 1999
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
ix
hairdressing, beauty therapy and skin penetration
industries is limited. The risk assessment found that the
potential cost to the community from the existence of
infectious conditions/communicable diseases is unlikely to
be significantly different to an unregulated model under
the current legislation.
Table E.2: Communicable Disease and Infectious Conditions
arising from activities undertaken in the Hairdressing,
Beauty Therapy and Skin Penetration Industries HIV Herpes virus (both genital and
oral)
Hepatitis B (HBV) Fungal skin and nail infections
Hepatitis C (HCV) Pseudomonas
Hepatitis D (HDV) Staphylococcus
Other chronic blood borne
diseases
Streptococcus
Human papillomavirus infection
(both skin and genital)
Bacterial and viral
conjunctivitis
Head Lice
Source: Communicable Diseases Unit, Queensland Health; 1998
An analysis of the mode of transmission for these diseases
was undertaken as part of the risk assessment. The
effective management of these infections/diseases involves
the following:
knowledge of infectious agents, major routes of
transmission and methods of interruption of
transmission;
skills to apply the above knowledge in practice;
monitoring and surveillance of outcome of activities;
and
support from management to implement the required
techniques (e.g. use of disposable gloves, equipment,
cleaning procedures etc.), time and resources.
It was apparent from assessing the identified diseases and
modes of transmission that premises have little or no
influence over the spread of these diseases. However, the
risk assessment acknowledged the role played by the
environment in facilitating the conduct of appropriate
infection control practice. The risk assessment found
that infectious diseases for which the general public are
at greatest risk are those which fulfil the following
criteria:
1. No effective treatment; 2. No effective immunity in normal (non-immunocompromised)
hosts;
3. No preventative vaccine; 4. Highly contagious;
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
x
5. Highly virulent (pathogenic); 6. Easily spread (e.g. aerosolisation); and 7. Difficult to control (aerosol spread, natural
reservoirs).
Diseases which meet criteria 1 to 3 are HIV/AIDS,
Hepatitis C (HCV) and Hepatitis D (HDV). All of these
diseases are blood borne viruses that are spread primarily
by inoculation, vertical spread and/or direct blood
contact6. Infection with these agents may lead to
shortened life span and severe morbidity prior to death.
In order to determine the total level of risk associated
with individual activities, the risks of each individual
procedure were considered as to whether they involve the
inoculation of the skin, whether bloodletting occurs
accidentally or as part of the procedure, and the
knowledge and skill of the operator.
Those activities that generate higher risks should be
subject to stricter controls than those activities that do
not. It is apparent that requirements to control
bloodborne diseases would also generally encompass
requirements to control bacterial and other infectious
conditions.
However, the imposition of standard controls across all
disease types irrespective of their potential risk will
impose unnecessary costs on moderate to lower risk
activities without generating any additional benefits to
the community. The separation of activities into different
risk categories will assist in developing a better
targeted, more cost-effective risk management approach.
Table E.3 summarises the number of consumers that could
potentially be affected based on the estimated incidence
rates for available blood-borne disease types and the
level of participation in each of these industries.
6 The methods of spread and mechanisms for transfer are discussed in detail in
the Risk Report.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xi
Table E.3: Illustrative example of persons potentially
infected per annum (Qld)7 Disease No. of persons
potentially
infected
HIV 2.73
HBV 2,051.10
HCV 410.22
Note: Calculation based on actual prevalence rates supplied by Queensland
Health.
Source: SKM Economics and CDU
As can be seen from this data, the potential risk arising
from these activities could be quite significant depending
on the disease/infectious condition being assessed. As a
result, there appears to be a prima facie case for the
imposition of some mechanism to control the spread of
diseases from these activities.
Whilst enforcement of the current hairdressing, beauty
therapy and skin penetration legislation appears to focus
on the structural design and construction of premises used
in the provision of these services, the existing
legislation also prescribes means of cleaning,
disinfecting and sterilising equipment and minimum hygiene
standards for the conduct of affected businesses.
The majority of infections that occur in the affected
activities appear to be the result of poor operator
knowledge of appropriate infection control or from poor
patient after-care. This was reiterated by the findings of
the risk assessment and the feedback obtained through the
project‟s consultation process. It is apparent that the
primary cause of infectious conditions and/or the
transmission of communicable diseases is the operator’s
lack of knowledge and skill in applying appropriate
infection control practices. The current legislation fails
to address this issue. Further, a review of the
effectiveness of the current prescriptive means of
cleaning and hygiene standards did not find a
significantly different outcome to that which would have
occurred in the absence of the legislative requirements.
Therefore, it became apparent that the current legislation
is not providing an appropriate mechanism to effectively
minimise risks.
7 Calculations based on probability of disease transmission * number of services
performed per premises * number of premises * prevalence rate.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xii
Reform Options
Alternative mechanisms can either be voluntary (i.e.
through industry based initiatives) or regulatory (i.e.
legislative enforcement). For the purposes of this review,
five (5) regulatory model options were considered in
detail:
1. Option 1: No Regulation; 2. Option 2: Negative Licensing; 3. Option 3: Two-tier model8; 4. Option 4: Premises model; and 5. Option 5: Premises model and licensing of individual
service providers.
Option 1: No Regulation
Under this option, all direct regulatory controls on
hairdressing, beauty therapy and skin penetration
activities would be removed.
The assessment of the costs and benefits under a no
regulation model suggests that the maximum benefit is
gained when the risks associated with any given activity
is low. As such, it is best suited to the lower and no
risk activities where control and enforcement costs are
unlikely to be less than the benefits of reduced health
risks and associated costs.
The application of an unregulated model for higher risk
activities is likely to generate significant health
consequences. Furthermore, potential direct health costs
could be in the vicinity of $32 million per annum9. As
such it would be inappropriate to implement such a system
for higher risk activities. The existence of effective
self regulation and voluntary standards of infection
control would assist the reduction of risks associated
with hairdressing, beauty therapy and skin penetration
activities under this model. At present, no effective
means of self regulation exists across the majority of
participants affected by the legislation.
The inability of an unregulated market to distinguish
between the varying risks of activities and the need to
implement some form of control over higher risk
activities, eliminates the “no regulation” option as a
8 The two-tier model is a combination of negative licencing for lower to
moderate risk activities and infection control licencing for higher risk
activities. It is based on the level of risk associated with each activity and
targets requirements towards the causal factors of disease transmission. 9 Calculated on the basis of number of potential infections for body piercing,
acupuncture and tattooing and the estimated cost per patient for HIV, HBV and
HCV.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xiii
viable alternative for consideration for moderate and
higher risk activities. However, no regulation for no risk
or lower risk activities appears to be the most practical
method (in terms of costs) of addressing these activities
as, over time, market forces will dictate the optimal
standard to minimise the risks to the public. This
outcome is consistent with the stakeholder feedback which
saw no submission in support of this option.
Option 2: Negative Licensing
Negative licensing imposes specific behavioural
requirements (e.g. compliance with standard infection
control guidelines) that if not followed, would result in
a statutory offence and the imposition of specific
statutory penalties. This model could also involve an
enforcement body having powers to apply to a Court for an
Order that an individual be prohibited from undertaking a
specific activity.
The negative licensing model provides a useful tool in
establishing minimum criteria for the practice of
infection control. However, its inability to address
training, skill and knowledge of the operator and
infection control procedures limits its effectiveness in
minimising infection control.
The ability to separate activities according to their risk
profiles provides a better model for minimising health
risks. The incremental costs of implementing the model are
less than the existing legislation but marginally higher
than an unregulated market, primarily because an
enforcement body is involved and the removal of licence
fee income.
The marginal costs of implementing the model are
outweighed by the anticipated improvements in the disease
costs associated with the higher risk activities. As a
result, the model will provide a better overall result for
the community than either the existing regulatory model or
an unregulated market.
Support for this model was marginal in recognition of the
marginal improvement in consumer protection, with 4 of the
75 submissions supporting this option10.
10 It should be noted that there were 18 other submissions which were either
unclear in their support for a particular model or suggested combinations of
elements within the previous models. The remainder (ie. 16 out of 75) did not
comment on a preferred regulatory model.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xiv
Option 3: Two-Tier Model
A Two-Tier Model would combine the elements of a negative
licensing system for lower/moderate risk activities with a
licensing system for higher risk activities.
The risk assessment found that the most effective means of
minimising the risks to the public from blood borne virus
infections would be to ensure that all persons involved in
skin penetration activities have undergone a course of
instruction/certification in infection control.
The two-tier model is the most effective method of
reducing infectious conditions/communicable disease risks
to consumers from hairdressing, beauty therapy and skin
penetration activities. As a result, it is highly probable
that the net benefits of risk reduction would far outweigh
the anticipated costs of implementation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xv
Assuming an annual $200,00011 regulation administration
and maintenance budget and no income, the reduction in the
number of infections from HIV alone would need to be less
than 1 case per annum at an average cost of $600,000 per
case. In reality, the income associated with licensing of
higher risk activities would reduce this to less than one
case.
With maximum annual direct disease cost savings of
$62.5 million, this option will generate the most-cost
effective solution to mitigating the risks of these
activities.
This conclusion was consistent with stakeholder responses
which resulted in the largest number of submissions (30 of
the 75 ) supporting this option.
Option 4: Premises Based Model
Under this option, the legislation would require the
licensing of premises and the imposition of enforceable
codes of practice. Under a premises based model, the costs
and benefits are similar to that of the existing
legislation. The key distinction between this option and
the existing legislation is the incorporation of industry
codes of practice and the placement of building/premises
requirements within the Building Code of Australia.
The restrictions placed upon competition within the
affected activities appears to reduce the scope of
services provided and are not based on the risks
associated with the service provision.
This model is unlikely to be as cost effective as either
Option 2 or Option 3 as the requirements do not address
the differences in risk levels associated with the
different activities provided within the hairdressing,
beauty therapy and skin penetration industries.
The lack of any material benefit associated this model was
reflected in the support provided by stakeholders, with
only 7 of the 75 submissions supporting this option.
11 Estimated costs may be marginally higher than the existing regulatory cost
for skin penetration activities which is estimated at $160,000 based on current
charges. For the purposes of the study, a 25% premium on existing costs have
been identified.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xvi
Option 5: Premise Based Model plus licensing of
individuals
A number of proposals indicated that variations to the
above models may provide better outcomes than either of
the four options presented earlier. Option 5 provided such
a variation by adding the licensing of individuals to the
framework established by Option 4. All of the costs and
benefits associated with Option 4 remained applicable to
this option, although the licensing of individuals
strengthens the ability of a premises based model to meet
objectives of the legislation. Option 5 resulted in a
better outcome than Option 4 but was not as cost effective
as Option 3. One submission proposed this model.
Overall Assessment of Reform Options
Cost Benefit Assessment of the Reform Options
A cost benefit assessment of the alternative models was
undertaken to ascertain the relative merits of each
option. The outcomes of this assessment found that a two-
tier model that categorised activities into four major
risk groups (refer Table E.4 on the following page)
provided the most cost effective solution to mitigating
the potential health risks associated with hairdressing,
beauty therapy and skin penetration activities.
Only Options 3 and 5 were able to meet the primary
legislative objective of risk minimisation. Option 3 is
the preferred model. This option removes any regulatory
requirement on those activities that generate no risk.
Conclusions
The assessment of the reform options identified different
strengths and weaknesses in all models. However, it
became apparent from the outcomes of the risk assessment
that the selection of a two-tier system of administration
for activities under the hairdressing, beauty therapy and
skin penetration legislation will deliver the least cost
method to effectively minimise risk to the public from
infectious diseases/conditions.
No net public benefit could be demonstrated with the
retention of the existing regulations. Furthermore, it
was found that the benefit to the community would be
greater under an alternative model. The assessment of the
reform options identified different strengths and
weaknesses in all models proposed and these are summarised
in Appendix C. The alternative associated with the
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xvii
highest net public benefit is a model that is based upon a
two-tier regulatory system targeted at specific
hairdressing, beauty therapy and skin penetration
activities on the basis of risk of disease transfer.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xviii
Table E.4: Activities categorised by risk Higher Risk Moderate Risk Lower Risk No Risk
Acupuncture Acupuncture
(using pre-
sterilised,
single use
needles).
Application/M
ending of
Acrylic full
nail sets
Blow
wave/Blow
drying
Body
Piercing/Plea
sure Piercing
Burning/scarrin
g/ branding
(with heated
instruments)
Application
of cosmetics
(eg. eyes
etc)
Electromagnet
ic therapy
Collagen
Implantation
Cuticle Cutting Body Wrap Lash perm and
extensions
Extractions Electrolysis
Hair cutting
Diathermy/Red
Vein
Treatment
Lymphatic
drainage
without skin
penetration
Finger prick
testing
Piercing using
closed piercing
guns and
disposable
cartridges.12
Face and skin
peels
Facial Scrub
Liposculpture
(Non-
Surgical)
Implantation
(eg. hair or
other
substance)
Shaving (using
cut throat or
other non-
disposable
instruments)
Filing and
cleaning
nails
Massage
provided no
contact with
open lesions
occur.
Lymphatic
drainage
through the
use of skin
penetrating
devices.
Waxing Hair
„styling‟
with brush
Perming
Microdermabra
sion
Massage Shampooing
Micropigmenta
tion
Other
manicure
services
Shaving using
single use
disposable
razors
Red Cross
Blood
Services
Tinting/Colou
ring (Hair)
Scarring/Cutt
ing/ Bleeding
(using a
knife or
other skin
penetrating
instrument)
Tattooing
12 Whilst ear piercing invariably results in blood loss, the actual blood loss
appears to be accidental rather than deliberate. Further, the „risk‟ associated
with ear piercing is regarded as moderate as ear piercing utlises disposable
equipment, and the „gun‟ is sterilised between clients. Therefore, ear piercing
has been regarded as a moderate risk activity and not a higher or lower risk
activity.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xix
Overall, the PBT assessment concluded that Option 3 is the
most effective method of achieving the legislative
objective for the following reasons:
Removes barriers to competition imposed under the
existing and proposed premise based approaches;
Impedes competition only to the extent that businesses
undertaking higher risk (ie. skin penetrating)
activities must meet certain licensing criteria that
are clearly related to risk minimisation;
Addresses the factors implicated in the risks of
infection/communicable disease transmission (eg.
operator skill and knowledge);
Minimises the costs of disease to the community from
the activities undertaken in the hairdressing, beauty
therapy and skin penetration industries by recognising
that significantly higher personal, social and economic
costs arise from blood borne diseases than from other
infections;
Focuses on activities rather than industries, allowing
more effective targeting;
Addresses the weaknesses identified in the other
alternative models and/or provides the same level of
consumer protection more cost-effectively;
Clearly focuses on the roles of operators and business
proprietors in minimising the risks from communicable
diseases/infectious conditions;
Regulators are no worse off under this model as those
businesses requiring monitoring are liable to pay for
any audit/investigations undertaken; and
Instills a market incentive on participants to minimise
adverse behaviour by imposing costs of
investigations/audits on the non-compliant party.
Provides an effective level of protection to the public
from (a) Bloodborne diseases and conditions and (b)
Other infections by:
i. Requiring businesses that provide higher risk
activities to be licensed according to specified
risk minimisation criteria, and by requiring persons
who provide higher risk services to have completed
approved infection control training or examination;
and
ii. Requiring all service providers (irrespective of
risk classification) to take reasonable steps to
minimise the risks of infections/communicable
diseases.
Further, Option 3 also minimises the impacts on employment
within the affected industries and maximises access to
services by potentially disadvantaged groups (eg. infirm,
aged, rural and remote communities.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
xx
Finally, this outcome is consistent with feedback obtained
during the consultation process which resulted in the this
option receiving the support of the largest number of
respondents.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
1
1. Introduction
As shown in Figure 1.1, health, well being and economic
prosperity are interrelated as health care contributes to
the productivity of the population through the reduction
of lost productive capacity through illness and disease,
which in turn promotes economic growth and additional
wealth. As a result, health care involves a trade-off
between this potential improvement in productive capacity
and the costs of supplying health services.
Figure 1.1: Interrelationship between health, well being
and prosperity
Physical
Environment
Social
Environment
Genetic
Endowment
Individual
Response:
Behaviour Biology
Health and
function
Disease and
InfectionsHealth Care
ProsperityWell being
Source: Australian Institute of Health and Welfare, 1995
No modern society is wealthy enough to eliminate the
societal risk from all infectious conditions and/or
diseases. As a result, debate about health priorities and
how to implement them is not new. All governments across
the world have made judgements on what health services
they can afford and the instruments used to operationalise
them.
In the case of hairdressing, beauty therapy and skin
penetrating activities in Queensland, societal health risk
management is implemented through Parts 5 and 15 of the
Health Regulation 1996.
Medical literature indicates that the health consequences
to consumers and operators in these industries are
potentially serious. Skin penetrating procedures can give
rise to very serious infectious conditions and/or
communicable diseases including Hepatitis and HIV.
Similarly, various bacterial infections ranging from minor
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
2
to serious can occur through the various activities
undertaken by hairdressers and beauty therapists.
The purpose of this report is to assess the need for, and
benefit arising from the current legislation, and to
identify the costs and benefits to society of proposed
alternative regulatory models in order to maximise the
social benefits arising from Government intervention.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
3
2. The Public Benefit Test Process
2.1 National Competition Policy
After years of separate and sometimes conflicting
legislation governing the business activities between
States, all levels of government in Australia agreed to a
cooperative framework for addressing inconsistent,
ineffective and/or anticompetitive legislation within
their individual jurisdictions.
The agreement known as the Competition Principles
Agreement was based on the recommendations arising from
the Hilmer Report on National Competition Policy in 1993.
As part of this agreement, any regulation that sought to
continue, extend or introduce restrictive provisions on
particular market participants had to be reviewed and an
assessment of its impact on the net benefit to the
community made.
This assessment process was formalised into what has
become known as the Public Benefit Test (PBT). The PBT
process has been used to assess the cost-effectiveness of
the hairdressing, beauty therapy and skin penetration
regulations of the Health Act 1937.
Under this process, the governing principle underlying any
legislative review is that any legislative restrictions on
competitive behaviour shall be removed unless it can be
shown that:
the benefits of the restriction to the community as a
whole, outweigh the costs of the restriction; and
the objectives of the legislation can only be achieved
by restricting competition.
2.2 Project Methodology
In undertaking a PBT, Queensland Treasury Guidelines13
stipulate a number of key tasks that should be completed.
These are:
clarify the objectives of the legislation;
identify the nature of the restriction;
analyse the likely effect of the restriction on
competition and on the economy generally;
assess and balance the costs and benefits of the
restriction; and
consider any alternative means for achieving the same
result, including non-legislative approaches.
13 Queensland Treasury - Public Benefit Test Guidelines, 1994
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
4
As illustrated in Figure 2.1, the project‟s methodology
embodies these fundamental requirements and extends the
analysis to incorporate a risk assessment in order to
identify the relative effectiveness of the alternative
models under consideration.
The project was completed in two primary stages:
Risk Assessment; and
The Public Benefit Process.
The risk assessment stage resulted in the production of a
separate risk assessment report which forms the foundation
for the analysis contained in this report.
2.3 Consultation and Interstate Comparisons
In undertaking the Public Benefit Test, a number of key
stakeholders were identified and a consultation process
was established to elicit their views and ideas regarding
the potential impacts of the current legislation and any
proposed changes on their activities.
This consultation process involved the distribution of a
detailed discussion paper outlining issues to be
considered by stakeholders in framing their submissions to
the process. Approximately 75 submissions were received
during the project and a summary of the submissions has
been included in Appendix A.
A Stakeholder Reference Group consisting of affected
parties was also established to discuss issues raised in
the discussion paper and to assist the project team by
providing advice and explanation of the procedures
undertaken in their respective businesses. This working
group, coordinated and facilitated by Queensland Health,
consisted of members from industry, local government and
the community.
A Value Management Workshop was held to assist the project
team and stakeholders gain an appreciation of the health
risks arising from the activities undertaken by industry
participants. This workshop assisted the identification of
the key diseases/infectious conditions that may arise from
the activities undertaken and the mode of transmission of
those diseases. The outcomes of this workshop are
incorporated into this report.
In addition, a number of individual meetings were held in
Toowoomba and Brisbane to clarify various elements of the
risk assessment and cost benefit analysis contained in
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
5
this study. This information has been incorporated into
the body of the study.
Further, a comparison of similar legislation in other
states was undertaken to „test‟ the practicality and
comparability of the proposed approach (refer to Section
9). Finally, the outcomes of the study have been reviewed
by a Project Steering Committee consisting of a number of
Government Departments.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
6
INSERT A3 FIGURE
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
7
3. The Existing Legislation
3.1 Identification of Affected Provisions
The current legislation administered by Queensland Health
consists of the following pieces of legislation:
Health Act 1937; and
Health Regulation 1996 (Parts 5 and 15).
Sections 33 and 100A of the Health Act 1937 enables Parts
5 and 15 of the Health Regulation 1996 respectively. These
parts of the Health Regulation 1996 have the following
effect on participants within the hairdressing, beauty
therapy and skin penetration industries (refer Table 3.1):
require the licensing/registration of premises at which
hairdressing, beauty therapy and skin penetration
activities are conducted, as well as the licensing of
mobile hairdressing operators;
prescribe the means of cleaning, disinfecting and
sterilising equipment and items used in the conduct of
these businesses;
prescribe the minimum hygiene standards for the conduct
of affected businesses; and
set minimum building standards for premises.
Table 3.1: Affected Provisions Legislation Sectio
n
Description/Purpose
Health Act 1937 s.33 Enables the application of Part 5 of the
Health Regulation 1996.
s.100A Enables the application of Part 15 of the
Health Regulation 1996.
Health Regulation
1996
Part 5 Defines Hairdresser
Div. 2 Provides for licensing by local authorities
Div 3. Sets out the structural requirements for a
hairdresser‟s shop and, where a mobile
service is operated from a building or
caravan, the premises in respect of which a
mobile hairdressing licence is sought.
Div. 4 Identifies the sanitary provisions which the
licence holder must comply
Div. 5 Prescribes methods for cleaning &
disinfecting equipment.
Div. 6 Prohibits persons knowingly suffering from
an infectious skin disease or parasitic
infestation of the hair or skin from entering
the licenced premises and prohibits
hairdressers from carrying out services on
any person they know or suspect is suffering
from those conditions.
Part
15
Skin Penetration
Div. 2 Provides for licensing by local authorities
Div. 3 Sets out the building and sanitary
requirements of a skin penetration
establishment.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
8
Div 4 Sets out restrictions on the conduct of
operators with respect to cleansing and
infectious people.
Div 5 Sets out building and sanitary requirements
for those operators only conducting closed
ear piercing activities.
Source: Queensland Health Discussion Paper - Review of Hairdressing, Beauty
Therapy & Skin Penetration Legislation, 1998
A copy of the relevant legislative extracts have been
included in Appendix B.
3.2 Objectives of the legislation
The objectives of Queensland Health‟s Public Health
Program are:
to reduce levels of preventable morbidity and mortality
resulting from disease and injury; and
to create social and physical environments which
support and enhance health.
The objective of the current hairdressing, beauty therapy
and skin penetration legislation is to support these broad
corporate objectives by preventing the transmission of
disease and infection from these activities.
The proposed objective of the new legislation will be to
minimise the risk of infection and the transmission of
disease from the activities undertaken in hairdressing,
beauty therapy and skin penetration activities.14
3.3 Nature of Restrictions
In a free market, unfettered by regulatory constraints,
the supply of goods and services is determined through a
cost-benefit decision taking into account the demand
characteristics of purchasers and the costs of production.
All direct costs (i.e. private costs) are embodied in the
production process and are therefore fully reflected in
the price charged to consumers of that particular good or
service.
However, in the case of a social good, that is, a good
where the costs of provision do not fully incorporate the
true costs (e.g. potential health costs of treating an
infected person) of the service or good, the market is
unlikely to produce an optimal result for society.
It is often argued that in these situations, government
intervention is justified. If we assume that the „private‟
14 Queensland Health Discussion Paper - Review of Hairdressing, Beauty Therapy &
Skin Penetration Legislation, 1998
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
9
production cost of supplying skin penetrating services is
Cp and consumer demand is represented by the curve Dd1 (as
shown in Figure 3.1), the market would supply Qp services.
However, the actual „social‟ cost of supply is Cs and not
Cp. If the services were properly costed, then the market
would provide only Qs services. This is an example of
market failure15 and is illustrated in Figure 3.1.
Figure 3.1 Social vs. Private Costs
Cost
Quantity
Dd1
Ss1
Qp
Cs
Qs
Cp
Social
Loss
Ss2
Effect
of
Regulations
A
B C
Source: SKM Economics
This is often referred to as market failure and is a
fundamental requirement for government intervention.
Government intervention in these circumstances is designed
to provide sufficient incentives to incorporate social
costs by market participants. It is argued that in the
absence of this intervention, a social loss illustrated by
the triangle ABC in Figure 3.1 would occur.
In the case of the hairdressing, beauty therapy and skin
penetration activities, this social loss is the potential
costs imposed on society by not implementing appropriate
and effective infection control practices16.
In line with this general philosophy, the current
legislation imposes restrictions on a number of aspects of
business activity undertaken by operators within the
hairdressing, beauty therapy and skin penetration
industries.
15 Where the supply is represented by curves Ss1 and Ss2 respectively.
16 Illustrative examples of the costs of individual diseases are discussed
later.
Shift in supply due
to increased
production costs.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
10
The requirement for licensing/registration of
participants/premises represents a restriction on
potential entrants into the market. Furthermore, the
requirement to build structures in accordance with
specified construction standards could act as a potential
barrier to entry and reflects a restriction on
participant’s competitive conduct.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
11
As shown in Table 3.2, the definitions for hairdressing,
beauty therapy and skin penetration contained in the
legislation specify a number of activities that are
undertaken by participants within those industries.
However, these definitions fail to encompass the full
range of services performed by existing operators and
exclude other operators (e.g. medical practitioners,
pharmacists, chiropractors, physiotherapists17 etc.) who
undertake similar services (e.g. acupuncture and massage)
in the conduct of their professions.
Table 3.2: Definitions contained in the existing
legislation Term Definition
Hairdressing means every person who shaves, cuts, trims, dresses, waves,
curls, stains or dyes or who in any way treats the hair of
any person for a fee or reward performs scalp or facial
massage, manicure, pedicure, or in any other way whatsoever
treats or otherwise deals with the head, scalp, face, hands,
skin, fingernails, toenails, or feet or manipulates any form
of electrical treatment, but does not include a medical
practitioner, physiotherapist or podiatrist whilst engaged
in the conduct of his or her profession.
Skin
Penetration
means tattooing, ear piercing, acupuncture, or any other
process by which the skin of a living person is penetrated.
Source: Parts 5 and 15, Health Regulation, 1996
The existing restrictions impose additional transaction
costs on some participants, increasing their cost
structures and limiting their competitive position
relative to other operators e.g. undertaking activities
that give rise to similar risks.
The underlying questions are therefore:
whether the current legislation is effective in
minimising the risk of disease or infection
transmission;
whether the costs of the legislation outweigh the
benefits of implementation; and
whether there are any more cost-effective alternatives
to achieve the same or better outcomes.
17 Provided the services are undertaken in the conduct of their profession. The
legislation does not exempt persons from conducting activities unrelated to
their profession.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
12
4. Market Structure
Before assessing whether the legislation is effective in
reducing public health risks, it is useful to consider the
parties affected by the legislation and the nature of the
industries involved.
4.1 The Stakeholders
As shown in Table 4.1, there are number of participants
who are affected by the hairdressing, beauty therapy and
skin penetration legislation. Due to their diversity and
mobility, accurate data on the scale and participation is
difficult to obtain.
Table 4.1: Key Stakeholders Operators (i.e. hairdressers,
beauty therapists, tattooists,
acupuncturists, body piercers
etc.) conducting their activities
from fixed premises.
Consumers
Queensland Health
Local Authorities
Mobile operators Health Professionals
(registered/unregistered)
Unregistered practitioners Other Government Departments
The Australian Bureau of Statistics (ABS) collects
information on hairdressing and beauty salon businesses.
However, this classification does not capture all service
providers as some are contained within the ABS
classification for personal care services which also
incorporates tattooing, body piercing, baby sitters and
other categories too small to collect in isolation.
4.2 Hairdressing and Beauty Therapy Industries
4.2.1 Consumer characteristics
According to industry stakeholders, the industry is
characterised by consumers who view price, convenience and
quality as their primary determinants for selecting a
service provider. Further, hairdressing services appear to
be a discretionary expenditure item with many low to
moderate income earners undertaking the activity
themselves.
Hairdressing and beauty therapy are services that attract
a significant level of participation across a broad cross-
section of the community. As shown in Table 4.2
expenditure on services in these industries within
Australia was approximately $1.5 billion during 1993-94.
Total Queensland household expenditure on hair dressing
and other personal care services (including beauty therapy
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
13
services and ear-piercing) exceeded $155 million during
1993-94.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
14
Hairdressing services in Queensland accounted for
approximately $128 million of this expenditure during
1993-94, reflecting an average annual household
expenditure of approximately $191 or $38 per person.18
Based on an assumed average cost of approximately $20 per
visit, these expenditure figures suggest that around 6.4
million hairdressing services were provided in Queensland
during 1993-94.
Table 4.2: Annual Household Expenditure on Hair Dressing and
Personal Care Services by State and Territory, 1993-94 State Territories
QLD NSW VIC SA TAS WA ACT NT AUST
Hair
Services
(Male)
$38.0 $29.1 $38.0 $31.2 $24.4 $35.4 $50 $31.2 $34.3
Hair
Services
(Female)
$114 $77.0 $111 $115 $74.9 $108 $124 $85.8 $98.8
Hair
Services
(Undefined)
$38.5 $84.0 $41 $50.0 $61.9 $39.5 $41.6 $48.4 $57.2
Totals $191 $190 $192 $196 $161 $183 $216 $165 $190
Other
personal
care
services
$40.4 $38.8 $29.1 $17.7 $13.5 $32.8 $39.0 $26.0 $31.7
Source: ABS Catalogue 6535.0, 1996
4.2.2 Supplier Characteristics
There are currently a number of primary professional
associations within the hairdressing and beauty therapy
industry, including:
Australian Federation of Beauty Therapists (350
Members);
Advanced Association of Beauty Therapists (300
Members);
Hairdressing Federation of Queensland Union of
Employers (450 Members); and
Queensland Master Hairdressers‟ Industrial Union of
Employers (320 Members).
Other relevant organisations of equal importance but for
which data was unavailable include the:
Australasian Federation of Aestheticians and Beauty
Therapists Inc;
Association of Professional Aestheticians of Australia;
and
18 Population and household data from ABS catalogue 2016.3, 1996.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
15
Australian Professional Fingernail Association.
According to the Australian Bureau of Statistics19, there
were approximately 2,700 business locations that supplied
hairdressing and beauty therapy services within Queensland
as at September 1998. Listings in the „Yellow Pages‟
indicated 338 operators existed in the Brisbane area.
A survey conducted by Queensland Health in 1995 suggested
that there were approximately 270 licenced mobile
hairdressers across the State (excluding Brisbane City),
reflecting at least a 10:1 ratio between licenced fixed
and mobile operators.20 This suggests that the market for
mobile hairdressing and beauty services is quite small
relative to the overall market for these services. These
figures are based on registered locations and ignore
unregistered practitioners and mobile operators.
Therefore, the number of participants (both mobile and
fixed) in these industries may well be significantly
higher than those indicated by available statistics.
Despite these measurement difficulties, available
statistics and industry opinion suggest that the majority
of hairdressing and beauty therapy salons have less than
five (5) employees (including the owner) with over 98% of
registered businesses having less than 10 staff (as shown
in Table 4.3).
Table 4.3: Hairdressing and Beauty Salon Business Location
Count, Queensland as at September 1998 Number of Employees
<5 5 to 9 10 to 19 20 to 49 50 to 99 Total
Queensla
nd
2,219 421 40 2 1 2,683
Source: Australian Bureau of Statistics, unpublished data, 1998.
The actual cost of shop fitouts in these industries is
dependent on operator preferences and target markets. The
average cost of establishing a beauty salon has been
estimated at approximately $25,000 for beauty salons and
$20,000 for hairdressing studios21. It has been suggested
that the cost of compliance with the existing legislation
is relatively insignificant as the majority of costs would
be incurred irrespective of whether the legislation
existed or not.
19 Australian Bureau of Statistics, Unpublished Data - 1998
20 The survey conducted by Queensland Health did not include information from
the Brisbane City Council as they were unable to supply the data. Queensland
Health Discussion Paper - Review of Hairdressing, Beauty Therapy & Skin
Penetration Legislation, 1998. 21 Industry stakeholder opinion, 1999.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
16
4.2.3 Service Characteristics
As shown in Table 4.4, a wide range of services are
performed within these industries, the majority of which
are encompassed by the existing legislation.
Distinguishing the services provided by participants on
the basis of their industries is becoming increasingly
difficult as other participants such as cosmetic surgeons
and natural therapists enter the market. In addition, some
existing participants in these industries are also
providing services such as cosmetic tattooing, ear and
other body piercing, natural therapies and hair
implantation services that have blurred the distinction as
to what comprises beauty services.
Table 4.4: Examples of Services provided by Hairdressers
and Beauty Therapists Hair cutting Collagen implantation
Shaving Cuticle cutting
Hair „styling‟ with brush
or comb
Cosmetic tattooing
Blow wave/Blow drying Electrolysis
Acrylic full nail
sets/Artificial nail sets
Lymphatic drainage (using skin
penetrating procedures)
Application of make up Massage
Body wrap Micro dermabrasion
Brushing Micro pigmentation
Eye make up Extractions
Diathermy/Red vein
treatment
Ear piercing
Facial scrub Face and skin peels
Filing and cleaning nails Electromagnetic therapy
Lash perm and extensions Non-surgical liposculpture
Perming Shampooing
Waxing Tinting
Source: SKM Economics, based on information from industry stakeholders
This blurring of service function has made it more complex
to identify the nature and structure of these industries
and in turn, the enforcement of any legislation governing
the operation of these services.
4.3 Skin Penetrating Industries
The structure of the skin penetrating industries is more
difficult to measure than the hairdressing and beauty
therapy industries. No statistical data on body piercing
and tattooing is currently collected at a level that
facilitates the segmentation of these industries from the
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
17
“other personal service” category currently assembled by
the Australian Bureau of Statistics. However, some data on
particular segments (such as acupuncture) is available
from the Australian Bureau of Statistics.
As a result, measurement of the individual industries that
comprise this sector has been based on industry
stakeholder opinion, anecdotal evidence and where
available, data from the Australian Bureau of Statistics.
4.4 Body Piercing Industry
Body piercing involves the insertion of jewellery and/or
other items into various parts of the human body. Body
piercing has traditionally been viewed adversely by
mainstream Australian culture and the stigma associated
with undertaking these activities has affected the
availability of reliable information on participation
rates in these activities.
4.4.1 Supplier Characteristics
There is currently no professional association of body
piercers in Australia, although some participants are in
the process of trying to establish one. Moreover, there is
anecdotal evidence that a significant number of service
providers are currently not registered with any Council or
association.
A 1995 Queensland Health survey of registered skin
penetration premises across the State (excluding Brisbane
City) indicated that there were approximately 132 premises
where skin penetration activities (other than ear
piercing) were conducted22. A review of the „Yellow Pages‟
indicates that at least 22 providers existed in the
Brisbane area. It has been suggested by some participants
that the ratio of unregistered practitioners to registered
practitioners could be higher than 2:1.
These problems are compounded further by suppliers that
may be exempted under the existing legislation (such as
medical practitioners in the course of their profession)
who undertake piercings under the umbrella of different
service functions. In addition, beauty therapists and
tattooists also appear to be providing piercing services.
As a result, there is no definitive data source to
estimate the number of suppliers in the industry.
The lack of a definitive estimate of registered
practitioners makes the estimation of employment within
22 Queensland Health Discussion Paper - Review of Hairdressing, Beauty Therapy &
Skin Penetration Legislation, 1998
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
18
these industries impossible. Anecdotal evidence from
industry participants suggests that the average number of
employees is less than 3, with the majority of
unregistered practitioners consisting of owner-operators.
According to industry stakeholders, regional practitioners
in areas such as Toowoomba undertake between 2,500 and
3,000 piercings per annum at an average cost of between
$50 and $75 each. Metropolitan suppliers are estimated to
undertake approximately 15,000 piercings per year at a
similar price. Based on the estimated number of service
providers, the value of this industry could be as much as
(or greater than) $40 million per annum.23
The cost to establish a basic premises to meet the
requirements of the existing legislation is between $7,000
and $12,000, with the final cost of shop fit-out dependent
on the preferences of the service provider and the
expectations of their client market. For example, a
specialist piercing shop visited as part of this study
cost approximately $30,000 to establish in order to
compete effectively with other piercing studios and beauty
therapy salons that provided similar services.24
4.4.2 Consumer Characteristics
Body piercing appears to be a growing consumer trend
amongst younger persons in Australia. Queensland is no
different, with the majority of participants in the 16 and
35 years age cohort.25
The service is discretionary and does not appear to be
price sensitive. Price differentials between suppliers
suggest that whilst the market is competitive, consumers
are willing to pay a premium where additional value is
perceived to exist. Therefore, operators are able to
charge on the basis of value added services such as
aftercare checkups and presentation. In addition, the
choice of jewellery may also impact on the consumer‟s
decision and those providers offering the widest choice in
terms of jewellery quality and styles are likely to
attract a greater proportion of consumers.
4.4.3 Service Characteristics
Whilst the method of body piercing appears to be self
explanatory, body piercing studios often undertake a
variety of body art services including those summarised in
Table 4.5. The equipment required to conduct body piercing
ranges from simple pins and needles to more sophisticated
23 Industry Stakeholder Opinion, 1998
24 Industry Stakeholder Opinion, 1998
25 Industry stakeholder feedback
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
19
piercing guns designed to pierce various parts of the
body.
Table 4.5: Examples of activities undertaken by body
piercing studios Ear Piercing Scarring
Body piercing Branding
Pleasure piercing Cutting
Burning Implantation
Source: Industry stakeholders 1998
As can be seen, the types of services appear to be limited
only by the imagination of the consumer.
Health and safety issues are not formally addressed
through any accredited training course or professional
organisation. There is no requirement under the current
legislation with respect to education in infection
control. There appears to be a wide discrepancy between
service providers in terms of the quality of knowledge and
infection control practice. This discrepancy is often
conveyed to the consumer through lack of appropriate
advice on the potential risks of any given service.
4.5 Tattoo Industry
Tattoo - derived from the Tahitian word Tatau which was
onomatopoetic for the sound their tattooing instrument
made - is a method of decorating the skin by inserting
coloured substances under the surface. Traditionally,
tattoo instruments were simple, sharp, thin objects which
were dipped in ink and then pushed into the skin. Although
this method is still used by some modern artists, it is
extremely expensive and time consuming. Modern tattoo guns
are built on the same concept: a long sharp needle powered
by a small motor and controlled by a foot peddle.
Depending on what it is used for, the size and number of
needles vary. For outlining, a thicker single needle is
used except in the case of finely detailed work, or a
piece which requires fine lines, where a thin single
needle is used. For colouring and shading, thinner
multiple needles are used.
4.5.1 Supplier Characteristics
According to the Professional Tattooists Association of
Australia (PTAA), there are approximately 200 members
across Australia with approximately 44 of these within
Queensland.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
20
However, the PTAA suggests that their membership reflects
less than 30 percent of the total number of participants
in Queensland. As a result, there are potentially in
excess of 150 Queensland service providers currently
participating in this sector. In addition, a number of
beauty therapists are offering cosmetic tattooing as part
of their business activities and tattooing is also
conducted illegally in jails and other „backyard‟
operations.
The lack of definitive data on the number of operators and
the ability of Councils to identify them has been a major
enforcement issue for the existing legislation.
4.5.2 Consumer Characteristics
Like body piercing, tattooing has also been viewed
adversely by mainstream Australian society. Anecdotal
evidence provided by some stakeholders suggests that drug
users, members of gangs and military personnel are amongst
the primary consumers in this segment. However, there does
not appear to be any strong statistical evidence to
support this assertion.
According to the PTAA, an average tattooist could
undertake between 1,500 and 2,500 tattoos per year
depending on the location of their operation and at
various costs depending on the type of tattoo required.
This suggests that an average tattoo parlour (with two
staff) would undertake between 3,000 and 5,000 tattoos per
year. 26
The decision to have a tattoo requires patrons to consider
the expense, the amount of pain involved, the commitment
to carrying a permanent mark on the skin and the risk of
infection.
The PTAA suggests that the largest proportion of customers
falls within the 17 to 35 age bracket and do not appear to
be very price sensitive. The primary characteristics for
determining consumer choice is quality of service.
Further, it has been found that the majority of consumers
are not fully aware of the risks associated with
undergoing the procedure unless first instructed by the
operator.
4.5.3 Service Characteristics
As with the beauty therapists and body piercing, many
participants in these industries are diversifying their
26 Information provided by the Professional Tattooist Association of Australia,
1999
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
21
businesses to undertake activities traditionally provided
by others.
Many tattooists undertake body piercing as part of their
business activities blurring the distinction between each
industry. The PTAA has developed an infection control
training course in conjunction with Queensland Health in
an endeavour to improve health and safety amongst
operators and consumers. At present, just over 30 percent
of registered PTAA members have completed this course
successfully.27
4.6 Acupuncture Industry
The practice of Traditional Chinese Medicine (TCM), has a
long and dynamic history which began to take form nearly
5,000 years ago. TCM incorporates a variety of
interrelated modalities into a health system which takes
each individual into account as a whole entity, rather
than simply treating "diseases". Acupuncture is only one
element in the provision of TCM, but has become synonymous
with the provision of TCM services.
4.6.1 Supplier Characteristics
The acupuncture industry appears to be one of the most
organised groups affected by the current review. Its
primary representative body, the Australian Acupuncture
and Chinese Medicine Association (AACMA) suggests that the
industry has over 4,500 practitioners in NSW, Victoria and
Queensland, of which there are in excess of 600 in
Queensland28. Of the registered practitioners,
approximately 88 percent have completed or are undertaking
approved training courses that incorporate infection
control. It has been suggested that the majority of non-
AACMA registered practitioners have not undertaken any
formal training.29
In addition, acceptance of the practice by mainstream
consumers has seen the services conducted by other
practitioners including general practitioners,
chiropractors, naturopaths, shiatsu practitioners (i.e.
masseurs), osteopaths and physiotherapists.
Qualified acupuncturists undergo between 3 years (advanced
diploma) and 4 years (degree) training in the practice of
acupuncture and spend in the vicinity of $20,000 to
$35,000 on their education. The AACMA has developed an
approved infection control course in conjunction with the
27 14 out of 44 registered tattooists have successfully completed the course
according to the PTAA. 28 Towards a Safer Choice, Victorian Department of Human Services, 1996.
29 AACMA, 1999
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
22
Industry Training and Advisory Board, the Department of
Employment, Vocational Education, Training and Industrial
Relations as well as most State Health departments
including Queensland Health30.
The cost of building a premises to meet the requirements
of the existing legislation has been estimated to be
between $10,000 and $15,000. Industry practitioners have
acknowledged that the majority of costs would be incurred
irrespective of whether or not the legislation existed.
In addition to premises based practice, a number of
practitioners provide mobile services and
undertake/provide services at the place of the consumer.
The extent to which this occurs has yet to be defined as
no evidence is available. It has been suggested by the
AACMA that the level of participation in mobile
acupuncture is quite limited, with provision usually
limited to the aged, the infirm or disabled who are
otherwise unable to access these services.
4.6.2 Consumer Characteristics
The Australian Bureau of Statistics has conducted a
national health survey which, inter alia, incorporated an
assessment of consumer participation in other health
services including acupuncturists, chiropractors,
naturopaths, physiotherapists/hydrotherapists and
osteopaths. As shown in Table 4.6, approximately
0.29 percent of Queenslanders used acupuncturist services
during the two weeks preceding the survey. According to a
study commissioned by the Victorian Department of Human
Services, TCM practitioners provided around 25
consultations per week of which approximately 54 percent
used acupuncture as the primary service.31 Based on these
figures, the annual level of participation in Queensland
could therefore range between 254,000 and 421,200
visits.32 In 1992-93, the total expenditure on alternative
medicines in Queensland was estimated to be in excess of
$621 million, considerably higher than the estimated $360
million spent on pharmaceutical drugs in the same year.33
30 Infection Control Guidelines for Acupuncture; Australian Acupuncture
Association Ltd. 1997 31 Towards a Safer Choice - Victorian Department of Human Services, 1996
32 Calculation of 254,000 based on 1996 Census population estimates of 3,368,850
persons, 0.029 fortnightly participation. Calculation 421,200 based on 600
participants, 25 consultations per week over 52 weeks and 54% of consultations
being acupuncture. 33 National Health Survey; Cat. 4368.0 Australian Bureau of Statistics, 1995
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
23
Table 4.6: Persons using other health professionals in two
weeks prior to interview. (Rate per 1,000 people) Type of OHP QLD NSW VIC SA WA TAS NT ACT AUST
Acupuncturi
sts
2.9 3.9 2.6 0.9 3.0 1.5 2.1 5.1 3.1
Chiropracto
r
19.1 12.3 16.8 22.9 18.0 4.2 14.4 9.6 15.8
Chemist 26.3 22.0 21.2 20.8 28.9 30.2 24.8 30.9 23.5
Chiropodist
/
Podiatrist
3.7 5.6 7.2 8.5 6.6 10.5 1.7 8.9 6.1
Naturopath 7.7 5.0 6.8 7.3 7.1 2.7 3.2 5.4 6.3
Osteopath 0.2 3.5 1.5 0.5 0.9 1.2 0.3 2.7 1.8
Physiothera
pist/
Hydrotherap
ist
12.6 13.1 18.3 20.1 16.8 12.7 22.2 17.3 15.3
Source: ABS Catalogue 4368.0, 1997
The demographic picture of prospective consumers appears
to be consistent with the perception that acupuncture
services, like other health services, are not price
sensitive and discretionary in nature. A profile of
acupuncture consumers is provided in Table 4.7.
Table 4.7: Profile of Acupuncture/TCM Consumers More women than men utilise TCM
Persons aged between 30 and 50 were the most frequent users of TCM
Most consumers are white and live in urban or suburban areas
Highly educated; possibly indicating those persons with higher
disposable incomes.
Mainly professional, technical or entrepreneurial employment
backgrounds
Source: Australian Institute of Macrobiotic Studies, 1998
4.6.3 Service Characteristics
Table 4.8 summarises the typical services performed by
acupuncturists in the performance of their business.
Table 4.8: Services performed by Acupuncturists/TCM
Practitioners Acupuncture Chinese Massage
Laser Acupuncture Raw herb/mineral/animal
Decoctions
Electrical Acupuncture Lifestyle Advice
Cupping Prepared herbal/mineral/animal
medicines
Bleeding Dietary Advice
Scarring/Microbustion Orthopaedic manipulations
Point injection therapy Breathing, movement and
meditation techniques
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
24
Source: AACMA, 1999
4.7 Other Industry Participants
As noted earlier, there are a number of other participants
that could potentially be affected by the existing
legislation and proposed amendments. These include
practitioners currently exempted such as registered health
care practitioners (e.g. medical practitioners and
physiotherapists). Other groups such as naturopaths are
providing services, such as those given in Table 4.9, that
reflect similar infection risk characteristics as the
identified services but are not captured by the
definitions contained in the existing legislation.
The level and extent of exempted practitioner
participation in services that directly compete with
traditional hairdressing, beauty therapy and skin
penetration service providers is unclear, although there
is some anecdotal evidence to suggest that this occurs.
Similarly, the level of participation in the developing
industries such as hair replacement, aromatherapy,
naturopathy is likewise poorly documented with no reliable
statistical sources presently available.
Table 4.9: Services performed by other service providers Hair transplantation Vaccinations
Colonic irrigation First Aid
Finger prick testing Cosmetic tattooing
Blood transfusions
Source: Queensland Health and Industry Stakeholders 1998
4.8 Regulatory Participants
The current legislation is administered by Queensland
Health but applied and enforced through the local
authorities around the state. All local authorities charge
a fee ranging between $70 and $140 for registering
hairdressing and beauty therapy premises and a standard
fee of $200 for skin penetration business premises.34
The income obtained from these fees are used to offset the
cost of enforcement and inspection. Each local authority
has Environmental Health Officers who are responsible for
the licensing/registration of potential participants in
these industries. In addition, Environmental Health
34 Queensland Health Discussion Paper – Review of the hairdressing, Beauty
Therapy and Skin Penetration Legislation, 1998
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
25
Officers also undertake inspections of equipment used in
the provision of hairdressing, beauty therapy and skin
penetration services, provide infection control advice and
investigate complaints. However, the extent to which these
additional services are provided appears to vary
considerably between authorities and is also dependent on
the Environmental Health Officers concerned.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
26
The Chief Executive Officer of each local authority has to
ensure that employees have appropriate initial and ongoing
training, knowledge and skills to perform the job they are
employed under the Local Government Act 1975. However,
there are no specific requirements on local authorities to
ensure that the Environmental Health Officers are aware of
all procedures or practices associated with the individual
industries and activities captured under the existing
hairdressing, beauty therapy and skin penetration
legislation.
4.9 Unregistered/Unlicenced Participants
A key issue surrounding the current legislation targeted
at hairdressing, beauty therapy and skin penetrating
activities is the perceived large number of
unregistered/unlicenced operators. Legislative controls
imposed on participants are only effective against those
participants that appear to comply willingly with the
existing legislation.
The perceived existence of a significant number of
unregistered/unlicenced operators undertaking the full
range of activities captured by the existing legislation
appears to suggest that the current legislation is
incapable of providing the appropriate behavioural
incentives on unregistered/unlicenced operators to comply
with the legislation. However, it is unlikely that the
current legislation or any proposed legislation will be
able to deal with unregistered/unlicenced practitioners
without the assistance of an organised and responsible
operator association and the strengthening of the existing
legislative sanctions.
4.10 Mobile Participants
As well as registered/licenced mobile operators providing
the full spectrum of activities encompassed by the current
hairdressing, beauty therapy and skin penetration
legislation, there appears to be a significant number of
unlicenced/unregistered mobile operators (e.g. party plan
operators, hairdressers, wedding makeup specialists etc.).
Mobile operators appear to provide a niche service to
those clients that are aged, infirm, disabled, lack
transport, or have sufficient disposable income to pay a
premium to obtain a personal service within the confines
of their own residence.
The existing legislation permits the existence of mobile
hairdressing operators provided that they have a premises
comprising of a building or a caravan which meets the
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
27
required standard. However, the consistency in applying
this requirement appears to vary considerably between
local authorities with some banning their existence whilst
others waiver the requirements for a building and/or a
caravan.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
28
In contrast, under the existing legislation, it is implied
that skin penetration activities (with the exception of
ear piercing) are not permitted to be provided outside of
a registered establishment (i.e. effectively, a building).
The legislation directs the structural requirements of any
establishment which effectively eliminates any mobile
operation unless undertaken in a caravan or similar
vehicle capable of being fitted out in a similar manner to
a fixed premises. However, it appears that a number of
services (e.g. acupuncture) are provided in the home of
clients who are incapable of accessing or unable to access
services from a fixed premise35.
In addition, the legislation does not prevent the
establishment of temporary skin penetration establishments
that can be registered in accordance with the stipulated
requirements of the legislation. It has been suggested
that during some festivals, mobile body piercing shops
have been established both in accordance and in some cases
in contravention to the existing legislation.
The confusion relating to mobile operators in the
hairdressing, beauty therapy and skin penetration
industries appear to be caused by the inconsistent
application of the legislation and the individual
interpretation of the legislation by local authorities
and/or their enforcement officers.
The separation of the risk factors associated with the
activities provided and the role of the environment (i.e.
premises) in the transmission of infectious conditions and
communicable diseases, should clarify the need to impose
limitations on the conduct of mobile operators.
35 For example, rural and remote community access to fixed premises services
may be limited where the local population is unable to support the full time
operation of these services.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
29
5. Public Health Risk Assessment
5.1 Risk Ranking Considerations
The prioritisation of potential infectious
conditions/communicable diseases for the purposes of
implementing infection control policies is not an ideal
outcome. However, no society has the resources or
capacity to effectively eliminate these risks. As a
result, the level of risk borne by society involves a
trade-off between the risks and associated costs to the
public, the available resources and capacity of society to
control those risks and the impact of control measures on
industry and consumers. The decision to select an
„optimal‟ outcome is essentially subjective and has
traditionally been the responsibility of government.
In the case of the current project, the level of
appropriate risk management has not been determined.
Rather, the focus has been on the most cost-effective
mechanisms to minimise the infection risk to the public
arising from the activities undertaken in the
hairdressing, beauty therapy and skin penetration
industries. The actual costs of which will be dependent on
the resources available and the commitment of stakeholders
to achieve any given outcome.
Almost two thirds of all stakeholder submissions indicated
support for the segmentation of risks into categories that
reflected the consequences associated with contracting an
infectious condition or communicable diseases. In
addition, the majority of submissions to the review also
indicated that there was a need for regulation to assist
in minimising the risks.
During the consultation process, a workshop was held to
discuss the mechanisms of transfer of the identified
communicable diseases and infectious conditions. Whether
such a classification process could occur given existing
data constraints was also considered. The consensus
suggested that, if a choice was imposed on the public,
most people would agree that those conditions which gave
rise to the most dramatic impacts should receive the
primary emphasis in any infectious/communicable disease
control program.
5.2 Methodology
In order to determine whether the existing legislation is
effective in minimising the risk of infection or disease
transmission through the provision of services by
operators captured under the legislation, it is useful to
consider the mechanisms of creating and/or communicating
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
30
infections and the relationship they have with the
activities undertaken by the industries in question.
In the context of this study:
“Risk is defined as the potential exposure of the
community to the possibility of harm arising from
infectious conditions/communicable diseases.”
In order to measure this risk in socio-economic terms, a
key element is the assessment of the likelihood
(probability) and consequences (severity) to the public as
a result of infectious condition (and/or communicable
diseases) transference by the various activities being
regulated.
By focusing on activities rather than industries, the
causal factors giving rise to infection risk can be more
easily identified and targeted. In this manner, the risks
of communicating disease are minimised irrespective of the
industry undertaking those activities.
Further, to assist in consistency in the assessment of
risks from these activities, the study also considered
(for comparative purposes only) the methods used to
control risk in other health care settings. These settings
included medical treatment rooms in general practitioners‟
offices, dental surgeries, “Red Cross” clinics, podiatry
clinics and pathology specimen collection centres.
Similarly, activities were separated into skin penetrating
and non-skin penetrating activities to provide an initial
basis for separating high/lower risk activities. The
reasons for this initial breakdown relates to the serious
outcomes (morbidity and mortality) associated with
inoculation of micro-organisms compared with simple skin
or mucous membrane contact without actual skin penetration
by the procedure. Micro-organisms inoculated through the
skin are more easily spread in the body and
micro-organisms in client‟s blood stream can contaminate
the operator and the equipment. This poses a risk to
sequential clients if the equipment is not thoroughly and
effectively cleaned and sterilised or discarded.
As a result, our approach combines the assessment of each
disease to identify its underlying potential to be
communicated under alternative activities (i.e. skin
penetrating or non-skin penetrating).
This approach resulted in a separate report that provided
a risk assessment of the degree of risk from
infections/communicable diseases to the community arising
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
31
from hairdressing, beauty therapy and skin penetration
activities/procedures and an assessment of the most
effective means of minimising those risks.
This section summarises the key elements of the risk
assessment report.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
32
5.3 Infectious Conditions and Communicable Diseases
For the purposes of classification, Queensland Health
considered whether the disease or condition was acute or
chronic, whether it imposed financial costs on society and
the social/emotional costs of contracting the disease or
condition.36 A list of probable diseases/infectious
conditions that could arise from the industries identified
in Section 4 were provided by the Communicable Diseases
Unit of Queensland Health. These diseases are shown in
Table 5.1.
Table 5.1: Communicable Diseases and Infectious Conditions
arising from activities undertaken in the Hairdressing,
Beauty Therapy and Skin Penetration Industries HIV Herpes virus (both genital and
oral)
Hepatitis B (HBV) Fungal skin and nail infections
Hepatitis C (HCV) Pseudomonas
Hepatitis D (HDV) Staphylococcus
Other chronic blood borne
diseases
Streptococcus
Human papillomavirus infection
(both skin and genital)
Bacterial and viral
conjunctivitis
Head Lice
Source: Communicable Diseases Unit, Queensland Health; 1998
A comparison of the mode of transmission for these
diseases was undertaken and the results are summarised in
Table 5.2. It is apparent from assessing the identified
diseases and modes of transmission in Table 5.2 that
premises have little or no influence over the spread of
these diseases37.
The effective management of these infections/diseases
involves the following:
knowledge of infectious agents, major routes of
transmission and methods of interruption of
transmission;
skills to apply the above knowledge in practice;
monitoring and surveillance of outcome of activities;
and
support from management to implement the required
techniques (e.g. use of disposable gloves, equipment,
cleaning procedures etc.), time and resources.
36 Communicable Diseases Unit, Queensland Health - Ranking of
diseases/conditions in health & beauty industry, 1999 37 Premises by way of design and fit-out, for example, can however have an
enabling impact on infection control procedures.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
33
Table 5.2: Analysis of infections/diseases Disease/Infe
ctious
Condition
Likelihood
of
transmissio
n
Organism‟s
living
environment
Role of Skin/non-
skin penetration
in the development
of infection
Role of
knowledge
and skill
as mode of
transmissio
n
Role of
equipment as
a potential
reservoir in
the mode of
transmission
Role of
premise
s as
mode of
transmi
ssion
Pseudomonas
(bacteria)
not highly
infectious
moist
environments
Non-skin
penetrating,
infections on the
surface eg. nails
or skin
main cause
of
transmissio
n
2nd most
common mode.
n/a
staphylococc
us
not highly
infectious
Present on skin
(ie. exogenous
bacteria)
Direct skin to
skin
main mode
of
transmissio
n
2nd most
common mode
3rd mode
common
mode
streptococcu
s
very
infectious
in small
quantities
Phomytes
Spread through
cough, skin-to-
skin contact
2nd most
common mode
main mode 3rd most
common
mode
micrococcus not highly
infectious
present on skin
(ie. exogenous
bacteria)
Direct skin to
skin contact
main mode
of
transmissio
n
2nd most
common mode
n/a
sporotrichos
is
Uncommon through
environ.
Organism
(roseprick)
Inoculation
main mode
of
transmissio
n
n/a n/a
ringworm
Children
below
puberty
most at
risk
in humans and
animals
Direct skin-to-
skin or indirect
3rd most
common mode
main mode of
transmission
2nd most
common
mode
head lice
Common lice lay eggs
that hatch
Sharing combs,
hats
2nd most
common mode
main mode of
transmission
n/a
Herpes
simplex
Infectious
when skin
broken
dies in extreme
heat
Genital/mouth
contact
main mode
of
transmissio
n
2nd most
common mode
n/a
warts people-low
immune
humans Direct skin to
skin contact
2nd most
common mode
main mode of
transmission
3rd most
common
candida
not
communicabl
e
stomach, bowel
& genital tract
from within body‟s
digestive system
2nd most
common mode
main mode of
transmission
n/a
cladosporium Relatively
rare
wood, soil Direct skin to
skin contact
Ingestion
2nd most
common mode
main mode of
transmission
n/a
onychomycosi
s
common
fungal
infection
nail (esp.
toenail)
cross-infection main mode
of
transmissio
n
2nd most
common mode
of
transmission
n/a
Moraxella,
Enterobacter
aerogens, k
Klebisella
pneumoniae
Part of the
normal
flora of
the human
intestinal
tract.
Eye infection non-skin
penetration
Cross infection
Transient hand
carriage
main mode
of
transmissio
n
2nd most
common mode
of
transmission
n/a
Conjunctivit
is
Most common
in
children.
humans are
carriers
Direct contact
with eye
secretions
Cross infection
2nd most
common mode
of
transmissio
n
main mode of
transmission
n/a
HIV/AIDS
need more
than 1ml
blood to
infect
carried in
blood stream.
sexual
intercourse,
mother-to-baby,
drug users
inoculation
2nd most
common mode
main mode of
transmission
n/a
Hep B
Infectious
for non-
immune
carried in
blood stream.
sexual
intercourse,
mother-to-baby,
2nd most
common mode
main mode of
transmission
n/a
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
34
people drug users
inoculation
Hep C 6% of
people with
a
needlestick
contract it
carried in
blood stream.
sexual
intercourse,
mother-to-baby,
drug users
inoculation
2nd most
common mode
main mode of
transmission
n/a
Hep D only
develops
when have
Hep B
carried in
blood stream.
sexual
intercourse,
mother-to-baby,
drug users
inoculation
2nd most
common mode
main mode of
transmission
n/a
Mycobacteriu
m
tuberculosis
Aerosolisat
ion
carried
predominantly
in lungs of
carrier
through
respiratory tract,
person-to-person
main mode
of
transmissio
n
2nd most
common mode
of
transmission
n/a
Syphilis Infectious
for 24 to
48 hours
infects the
genitalia of
carriers.
through direct
(sexual) contact
or mother to baby.
n/a n/a n/a
It is suggested that infectious diseases for which the
general public is at greatest risk are those which fulfil
the following criteria:
1. No effective treatment; 2. No effective immunity in normal (non-immunocompromised)
hosts;
3. No preventative vaccine; 4. Highly contagious; 5. Highly virulent (pathogenic); 6. Easily spread (e.g. aerosolisation); and 7. Difficult to control (aerosol spread, natural
reservoirs).
Diseases which meet criteria 1 to 3 are HIV/AIDS, HBV, HCV
and HDV. All of these diseases are blood borne viruses
that are spread primarily by inoculation, vertical spread
and/or direct blood contact38. Infection with these agents
will lead to a shortened life span and severe morbidity
prior to death. In order to determine the level of risk
associated with individual activities, the risks of each
individual procedure were considered as to whether they
are associated with the inoculation of the skin, whether
bloodletting occurs accidentally or as part of the
procedure, and the knowledge and skill of the operator.
Those activities that generate higher infection risks
should be subject to stricter controls on their conduct
than those activities that generate less risk. It is
apparent that the requirements to control bloodborne
diseases would also generally encompass requirements to
control bacterial and other infectious conditions. The
imposition of standard controls across all disease types
irrespective of their potential risk would impose
38 The methods of spread and mechanisms for transfer are discussed in detail
within the body of the risk report.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
35
unnecessary costs on moderate to lower risk activities
without generating any additional benefits to the
community. The separation of activities into different
risk categories will assist in developing a better
targeted, more cost effective risk management approach.
5.4 Proposed Definitions
The identification of the causal factors influencing the
transmission of diseases has proven that industry based
regulatory measures are unwieldy and inappropriate.
Instruments should focus on the activity in question in
order to ensure that measures are appropriately targeted.
Nevertheless, practical requirements dictate the
definition of key elements to ensure that the
interpretation and application of any legislation is
consistent and easily administered.
As such, the following definitions were used to assist in
the identification and classification of activities during
the risk assessment process and have been formed through a
consensus opinion of what should be captured by any
legislation seeking to minimise the risks associated with
these types of activities.
Skin Penetrating Activities - Any activity involving the
piercing, cutting, puncturing, tearing or shaving of the
skin, mucous membrane or conjunctiva of the eye.
Non Skin Penetrating Activities - Any activity that does
not fall into the category of skin penetrating activities.
Higher Risk Activities - Any activity that causes blood or
other body fluid to be released as a consequence of its
operation.
Moderate Risk Activities -
Any activity that:
Has the potential to cause blood or other body fluid to
be released accidentally; or
Results in such small quantities of blood or body fluid
being released that no risk exists; or
As a result of the equipment being used, (e.g. single
use, pre-sterilised needles) mitigates the risk of
contamination arising from the activity being
undertaken.
Lower Risk Activities - Any activity that does not cause
blood or other body fluid to be released as a result of
its execution but may still create the opportunity for the
transmission of infectious conditions or communicable
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
36
diseases through inappropriate infection control
practices.
No Risk Activities - Any activity that effectively
generates no material39 risk of infectious conditions or
communicable disease transmission.
The following definitions of hairdressing and beauty
therapy were utilised to define the scope of the project:
Hairdressing - The cutting, styling or undertaking of any
similar activity involving facial or scalp hair for the
purposes of maintaining or enhancing a person‟s
appearance.
Beauty Therapy - The provision of any non-skin penetrating
service (excluding hairdressing) for the purpose of
enhancing a person‟s appearance (e.g. use of cosmetics).
39 Materiality for the purposes of this report has been deemed to reflect those
diseases which could in all likelihood be transmitted through blood and result
in severe sickness or death.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
37
It should be noted that the activity based approach to the
study makes the definitions of particular industries
redundant for the purposes of establishing a new
legislative model and were designed to facilitate the
identification of services provided by existing
participants. This was done by adopting non-prescriptive
definitions based on specific tasks or functions which
enables demarcation based on activity. It is recognised
that in practice, some participants in these industries
undertake activities which span across these definitions.
5.5 Potential Threat of Infection
As noted earlier, the key threat to participants in these
activities are generally related to blood borne diseases
such as HBV, HCV, HCD and HIV. Other infectious conditions
are generally non-life threatening, controllable and/or
corrective measures exist. Table 5.3 summarises some
recent Australian data on rates of infection for some of
the key diseases identified earlier.
Table 5.3: Current Prevalence Rates for key infections Disease Probability
due to skin
penetration
injuries40
Probability
of Chronic
Infection
Probability of
Mortality
after being
chronically
infected41
Prevalence
Rate42
HIV 0.5% 100% 100% 0.04%
HBV 30% 10% 25% 0.5%
HCV 3% 75% 10% 1.0%
HDV N/A N/A N/A N/A
Skin Rash,
nos
N/A N/A N/A N/A
Other Skin
Infections
N/A N/A N/A N/A
Source: The rates for this table are based on information provided by the
following agencies: Australian Institute of Health and Welfare, 1998;
Department of Human Services - SA, 1998; Queensland Health, 1999
These prevalence rates indicate the general societal
threat to participants in these industries. It is arguable
whether the actual risk is higher or lower depending on
the individual stakeholders lifestyle, immunological
40 Probability of contracting the disease through skin penetrating injuries such
as accidental needlestick injuries, tattooing, body piercing, acupuncture etc.
from an infected source. 41 Probability of death after contracting the infectious disease/condition.
42 It is possible that the recorded prevalence rates identified may not fully
reflect the „true‟ level of infection in the community (as it records reported
cases only). As a result, these figures are indicative of societal risk and
have been used as a basis for establishing cost estimates for the purposes of
this report.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
38
response and activity.43 However, it has been suggested
that these prevalence rates do not fully reflect the true
prevalence of diseases in society. Table 5.4 summarises
the number of consumers that could potentially be affected
based on the current probability rates for blood borne
disease types, and the level of participation in each of
these industries for assumed prevalence rates referred to
in Table 5.3.
Table 5.4: Illustrative Examples of Persons Potentially
Infected from Skin Penetrating Activities per year (Qld)44
Disease No of Persons Potentially infected
HIV 2.73
HBV 2,051.10
HCV 410.22
Source: SKM Economics and CDU 1999
As can be seen from this data, the potential theoretical
risk from these activities can be quite significant
depending on the disease/infectious condition being
assessed. As a result, there appears to be a prima facie
case for the existence of some mechanism to control the
spread of diseases from these activities. This case is
strengthened if it is assumed that reported prevalence
rates are understated due to the nature of recording
and/or reporting of particular disease types. As a result,
sensitivity tables have been incorporated to reflect
various levels of disease prevalence. These sensitivity
estimates provided below have been derived from
discussions with Queensland Health.
Table 5.5 summarises the potential increased risks of
infection based on the level of services provided, the
probability of infection and the alternative prevalence
rates for HIV, HBV and HCV. (A more detailed sensitivity
table is incorporated into Appendix E).
43 Refer to Risk Report.
44 Calculations based on probability of disease transmission * number of
services performed per premises * number of premises * prevalence rate *
probability of contaminated equipment being used in the activity (in this case
100%)* weight for estimated level of „under reporting‟ (in this case 0%).
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
39
Table 5.5: Illustrative Examples of Persons Potentially
Infected by Key Disease Weighted by Assumed Prevalence
Rates per Year45
Prevalence Rate HIV HBV HCV
Existing 2.73 2,051.10 410.22
50% Over-reported 1.37 1,025.55 205.11
50% Under-reported 4.10 3,076.50 615.33
100% Under-reported 5.46 4,102.20 820.44
Source: SKM Economics; Queensland Health 1999.
Table 5.6 summarises the number of persons potentially
infected in key industry groups for each disease type.
Table 5.6: Illustrative Examples of Persons Potentially
Infected by Key Disease Weighted by Actual Prevalence
Rates per Year Activity HIV HBV HCV
Body Piercing 1.45 1,089 217.8
Tattooing 0.44 330 66
Acupuncture 0.84 632.1 126.42
Total Persons 2.73 2,051.10 410.22
Source: SKM Economics; Queensland Health 1999
Nevertheless, based on actual prevalence rates, it would
appear that the actual risk to the community from the
blood borne diseases identified above is quite low. In
addition, if the assumption of 100% equipment
contamination is relaxed, the studies assumed range of
potential infections is considerably lower as evidenced in
Table 5.7.
45 Calculations based on probability of disease transmission * number of
services performed per premises * number of premises * prevalence rate *
probability of contaminated equipment being used in the activity (in this case
100%)* weight for estimated level of „under reporting‟.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
40
Table 5.7: Illustrative Examples of Persons Potentially
Infected by Key Disease Weighted by Alternative Rates of
Equipment Contamination Disease 100% Equipment
Contamination
75% Equipment
Contamination
50% Equipment
Contamination
25% Equipment
Contamination
HIV 2.73 2.05 1.37 0.68
HBV 2,050.80 1,538.10 1025.40 512.70
HCV 410.16 307.62 205.08 102.54
Total
Persons
2,463.69 1,847.77 1,231.85 616.92
Source: SKM Economics 1999
5.6 Consideration of Available Data.
A review of available data on these diseases was
undertaken to establish any evidence of the risks
associated with the activities undertaken by the
hairdressing, beauty therapy and skin penetration
industries.
Notification of infectious diseases (including blood borne
diseases) is legislated separately in each Australian
State and Territory. However, many of the potentially
serious infectious conditions may be completely
asymptomatic, meaning that both the carrier and potential
victim will not recognise their risk unless the carrier
has a blood test and their condition revealed. Therefore,
tracing actual infectious conditions/communicable diseases
to their source is difficult and in some cases impossible.
Hairdressers, beauty therapists and skin penetration
operators are not currently expected to notify infectious
conditions although they and other persons in the
community can report conditions to Queensland Health.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
41
In addition, data such as: infections post-manicuring,
blood loss while waxing, scissor nicks while cutting hair
or infections post-body piercing/tattooing are not
generally collected. As a result, the availability of
statistical data linking these diseases to the activities
undertaken by the industries captured under the existing
legislation in a causal manner is difficult to obtain.
There are no confirmed reports of Hepatitis C or HIV
sourced from a hairdressing, beauty therapy or skin
penetration service in Australia. The Queensland AIDS
Medical Unit provided a summary of the Queensland HIV
cases (1995-1997 inclusive) and confirmed that HIV
infections in Australia had not been sourced to either
hairdressing, beauty therapy or skin penetration
activities.
However, there exists a reasonable body of literature on
the adverse consequences of body piercing (including
acupuncture) and tattooing throughout the world. Much of
this literature relates to activities that occurred prior
to the recognition of HIV and HCV, the widespread use of
the HBV vaccine and the adoption of basic infection
control techniques including „standard precautions‟.46
A recent paper from the USA discusses the relationship
between HIV and skin penetration. Dr A Davis (MJA, 1995;
163:556) notes that a higher proportion of NSW blood
donors who were tattooed had evidence of HCV, without
other risk factors (a ratio of 5/13).
Similarly, there are reports of „barber-associated‟
Hepatitis C from Italy and there are many reports of
Hepatitis B associated with skin penetration activities
(tattooing and acupuncture) both in Australia and world-
wide prior to the introduction of disposable equipment and
basic infection control practices. However, the extent to
which these studies relate to Australia is limited by the
differences in social conditioning and processes
undertaken by individual industry participants.
As a result, available evidence suggests that the actual
reported risk of infection associated with hairdressing,
beauty therapy and skin penetration activities in
Australia appears to be quite low. This low reported
outcome is partially attributed to the lack of available
statistical evidence and an apparent reluctance of some
consumers to identify their participation in some of the
affected activities.
46 Details of the literature review and available evidence are contained in the
Risk Report.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
42
Further, whilst there is no evidence that blood borne or
other disease transmission in the hairdressing, beauty
therapy and skin penetration industries is associated with
any factors related to premises (i.e. buildings etc.),
there is general agreement that the environment
facilitates the conduct of appropriate hygiene practices
and therefore has a role in enabling the operator to
implement good infection control practices.
The ability of these viruses to be spread by blood
contaminated penetrating instruments and concerns about
the use of non-sterile equipment when skin penetrating
activities are performed or bloodletting occurs still
exist and therefore should be managed accordingly.
Tables 5.8(a) to (d) lists examples of activities, the
micro-organisims involved and their mode of spread. The
activities have been separated into “higher risk”,
“moderate risk”, “lower risk” and “no risk” categories
depending on whether there is skin penetration and blood
loss/exposure either accidentally or as a consequence of
the activity in question.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
43
Table 5.8a: Risk Segmentation of Activities - Higher Risk Activities Activities/Procedures undertaken
in the hairdressing, beauty
therapy and skin penetration
industries
Micro-organisms Mode of Spread
Higher Risk Activities47
(Blood flow arising as a consequence of the activity)
Acupuncture Blood borne micro-organisms Inoculation if non sterile re-useable
equipment is used
Body piercing/Pleasure piercing
(excluding the used of closed
piercing guns with disposable
cartridges)
S aureus
Blood borne micro-organisms
Direct contact – skin micro-organisms
such as S aureus causing a subsequent
infection.
Inoculation if non sterile re-useable
equipment is used
Collagen implantation Foreign material
contamination if not
sterile
Skin micro-organisms
· Inoculation of skin micro-organisms
without sterile equipment and
techniques
Extractions Skin Micro-organisms
Blood borne micro-organisms
Unclean, reusable equipment
Finger Prick Testing Blood borne micro-organisms Inoculation if non sterile reusable
equipment is used
Implantation (Hair or any other
substance)
Blood borne organisms
Skin micro-organisms
Inoculation
Lymphatic drainage through the
use of skin penetrating devices.
(E.g. Tubes etc.)
Skin microbes, blood borne
micro
organisms-organisms
This involves skin penetration and
this is considered to be higher risk
especially without sterile or
disposable equipment
Micro dermabrasion Skin micro organisms
Blood borne organisms
Local inoculation of endogenous
organisms or cross infection
Micro pigmentation Skin micro organisms
Blood borne organisms
Inoculation from non-sterile equipment
or endogenous skin bacteria
Red Cross Blood Services Blood borne micro-organisms
S aureus
Inoculation of skin micro-organisms
without sterile equipment and
techniques.
Direct contact – skin micro-organisms
such as S aureus causing a subsequent
infection.
Scarring/Cutting/Bleeding (using
a knife or other sharp
instrument)
Skin micro-organisms
Blood borne organisms
Inoculation from non-sterile equipment
or endogenous skin bacteria.
Tattooing Known blood borne micro-
organisms (Hepatitis B,
Hepatitis C, HIV)
Inoculation from non-sterile (re
useable) instruments.
Direct contact – skin micro-organisms
such as S aureus causing a subsequent
infection.
47 The risk of contamination is significantly reduced if sterile, new
(disposable) items are used once and disposed of carefully into a rigid
sealable container which is then incinerated.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
44
Table 5.8b: Risk Segmentation of Activities - Moderate Risk Activities Activities/Procedures undertaken
in the hairdressing, beauty
therapy and skin penetration
industries
Micro-organisms Mode of Spread
Moderate Risk Activities
(Accidental bloodletting or body fluid release, or risk is minimised through the use of disposable
equipment )
Burning scarring branding (with
heated equipment)
Nil heat destroys micro organisms
infection may develop after the event
in the healing process from endogenous
bacteria
Cuticle Cutting (cuticles are
keratin and do not have a blood
supply, if bleeding occurs the
operator has gone too deep ie
beyond the cuticle)
Skin microbes
Blood borne microbes if
equipment contaminated with
blood
Inoculation/Skin penetration can allow
entry of skin microbes or organisms on
equipment if it is neither sterile nor
disposable
Ear Piercing and Nose Piercing
(Using closed piercing guns and
disposable cartridges) 48
Skin Micro-organisms Unclean, reusable equipment
Electrolysis (involves needling
the hair follicles so is
potentially higher risk)
Blood borne micro-organisms
S aureus
Inoculation
Endogenous microbial inoculation into
the site of the procedure
Haircutting (NB razors are used
in shaving as well as
haircutting. The role in
haircutting may be to shave the
neck or to create a “rough” hair
cut)
Skin microbes
Blood borne microbes if
equipment contaminated with
blood
Skin penetration of customer with
blood stained scissors or re useable
razor
Skin penetration of the operator with
blood stained scissors or razor
Shaving (Cut throat or non-
disposable razors)
Blood borne micro-organisms
S aureus
Streptococci
Herpes simplex
Direct inoculation of blood borne
micro-organisms or skin micro-
organisms if non sterile, non
disposable razors are used
Waxing S aureus
Pseudomonas sp
Direct contact from inadequately
heated re -used wax. May result in
local skin infection where wax
applied.
There is NO literature evidence that
blood borne micro-organisms have been
spread by this technique.
48 Whilst ear piercing invariably results in blood loss, the actual blood loss
appears to be accidental rather than deliberate. Further, the „risk‟ associated
with ear piercing is regarded as moderate as ear piercing utlises disposable
equipment and the „gun‟ is sterilised between clients. Therefore, ear piercing
has been regarded as a moderate risk activity and not a higher or lower risk
activity.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
45
Table 5.8c: Risk Segmentation of Activities - Lower Risk Activities Activities/Procedures undertaken
in the hairdressing, beauty
therapy and skin penetration
industries
Micro-organisms Mode of Spread
Lower Risk Activities (No blood or body fluid release)
Application of
acrylic/artificial nails Pseudomonas sp
Environmental, if nails not sealed
Application of cosmetics
(including eye cosmetics)
Skin micro-organisms
Skin microbes contaminating
the product if it is not
single person use
Endogenous microbes
Direct contact contaminated re useable
equipment
Body wrap Skin micro-organisms
Skin microbes contaminating
the product if it is not
single person use
Direct Contact
Diathermy/Red vein treatment Nil during treatment,
possibly in the healing
phase with endogenous skin
microbes
Diathermy heat coagulates blood and
destroys micro-organisms
Face and Skin Peels Skin micro-organisms Direct contact from contamination in
re useable chemicals
Facial scrub Skin microbes Endogenous microbes
Hair „styling‟ with brush, comb
contaminated with hair or
secretions from previous
patients(s)
Staphylococci, Pseudomonas
sp, Head lice,
Streptococci, S aureus
Direct contact resulting in „surface‟
contamination of customer and
subsequent potential risk of infection
development.
Massage Skin microbes
Direct Contact
Other manicure services Skin microbes Direct Contact
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
46
Table 5.8d: Risk Segmentation of Activities – No Risk Activities Activities/Procedures undertaken
in the hairdressing, beauty
therapy and skin penetration
industries
Micro-organisms Mode of Spread
No Risk Activities
(No risk of infectious condition or communicable disease transmission)
Blow Wave/Blow Drying No Risk No risk
Electromagnetic therapy No Risk No risk if equipment wiped clean
Lash perm and extensions No risk No Risk
Lymphatic drainage without skin
penetration
No risk No Risk
Liposculpture (non surgical) No risk No risk
Massage (No contact with open
skin lesions)
No risk No risk
Perming No Risk No Risk
Shampooing No Risk No Risk
Shaving (single use disposable
razors)
No Risk No risk except to the operator who may
be exposed to blood or the risk of
inoculation with blood borne micro-
organisms if cut with a blood stained
razor
Tinting/Colouring (Hair) No Risk No Risk
Given the lack of suitable data to assess the actual risks
associated with the activities in question and the
existence of scientific evidence on the potential risk
associated with the activities undertaken by participants
in these industries, the underlying assumption should be
that all clients in these industries should be considered
potentially infectious.
5.7 Effectiveness of the Current Legislation
Given that the primary objective of the existing
legislation is to minimise the risk of infection from the
activities associated with the hairdressing, beauty
therapy and skin penetration industries, the primary
benefit to the public would arise from the cost-effective
control of these risks.
A primary finding of the risk assessment was the formal
recognition that different activities gave rise to
different levels of risk. Any legislation that intends to
minimise the risk associated with infectious conditions
and communicable diseases should therefore focus on the
processes/activities that give rise to those risks.
The profile of activities and risks outlined in Tables 5.8
(a) to (d) indicates that the major risks to public health
lie with blood borne diseases and therefore those
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
47
activities that are „intentionally‟ bloodletting in
nature.
The premises or environment of any given operator is not
directly relevant to preventing the transmission of
infectious conditions/communicable diseases arising from
activities undertaken in the restricted industries.
However, the environment enables practitioners to conduct
good infection control practices.
A primary focus of the current hairdressing, beauty
therapy and skin penetration legislation is on the
structural design of premises and types of materials used
in the construction of premises used in the provision of
these services49. This approach fails to address some
other crucial elements in minimising the risk to the
public, namely;
knowledge of infectious agents, major routes of
transmission and methods of interruption of
transmission;
skills to apply above knowledge in practice;
monitoring and surveillance of outcome of activities;
and
support from management to implement the required
techniques (e.g. use of disposable gloves, equipment,
cleaning procedures etc.), time and resources.
The inadequacy of the existing legislation as a mechanism
to effectively control the transmission of infectious
conditions/diseases is further evidenced through a survey
of 51 Brisbane based stakeholder premises undertaken by
Queensland Health.50 This survey found that premises that
complied with the existing legislation regarding cleaning
were just as likely to grow micro-organisms on their
equipment as those premises that did not comply.
It appears that premises based legislation fails to
address the key contributory factors leading to the
transmission of infectious conditions/communicable
diseases, namely;
knowledge and skill in applying appropriate infectious
control procedures;
use of and sterilisation of equipment used in
undertaking the service/activity; and
knowledge and skill of the operator in undertaking the
service.
49 The current legislation does not treat the premises as the only element for
infection control. Other aspects are also considered within a „package‟ of
issues. 50 Queensland Health, 1995
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
48
There does not appear to be any statistical evidence to
suggest that the existence of current legislation has had
any significant impact on the health outcomes identified.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
49
In fact, there is anecdotal evidence to suggest that the
prevention of practitioners to treat some
consumers/operators (e.g. those with infectious skin
conditions, head lice and/or parasitic infections51) under
the existing legislation may in fact diminish society‟s
ability to manage and arrest the spread of those
infections. The requirement of practitioners to observe
standard infection control practices may eliminate or
reduce the risk to the extent that participants can
interact in a manner that reduces/eliminates those risks.
Currently, there is no provision in the existing
legislation to address this possibility and removes access
to these services by the sick and infirm.
Further, the focus of the current legislation on
particular industries and the exemption of others who
undertake similar activities appears to ignore the
fundamental purpose of public health legislation.
Exemptions from the existing legislation on the basis of
professional registration do not appear to be based on the
existence of similar guidelines on infection control. As
such, it is questionable whether any exemptions should
occur unless the exempted participants undertake to
complete precautions at least equal to the requirements
set out in the current legislation.
The apparent inadequacy of the current legislation to
address the fundamental elements of infection control
suggests that it is unlikely to provide any public
benefit. Nevertheless, it is worthwhile considering the
existing legislation through the same framework used to
assess any potential reform option.
The blurring of service functions amongst participants has
made the enforcement of the existing legislation
difficult. It has also led to the inconsistent
application of the legislation by enforcement agencies.
This problem is exacerbated further by the difficulty
faced by regulatory agencies in interpreting and enforcing
the legislation effectively. The apparent inconsistency in
application of the current legislation and its impacts on
stakeholders are discussed in the following section.
51 s.59 prohibits hairdressers/consumers with infectious skin diseases, or who
are infested with head lice or other parasitic infection from carrying out the
operations of a hairdresser or from entering or remaining in a licenced
premises.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
50
6. Public Health Costs52
In the previous Chapter, the findings of the Risk
Assessment Report were summarised and it was noted that
there is a risk to the public that infectious
conditions/diseases may result from various hairdressing,
beauty therapy or skin penetration procedures. This
section now considers the likelihood (or probability) of
that happening, and the potential costs to the public
associated with such conditions/diseases.
In estimating the potential cost impact of diseases on the
community, cost of illness (COI) analysis can be used. By
measuring the impact of disease in economic terms, it
presents (from a monetary viewpoint) the way diseases
affect the community. However, it should be noted that
studies into the costs of infectious conditions and
communicable diseases in Australia are limited, with the
results of various valuation exercises generally yielding
quite diverse (and potentially contentious) findings.
The COI approach provides a useful “benchmark” for
assessing the costs and benefits associated with public
health issues. Costs calculated using COI analysis are
indicative only and are not intended to be a complete
measurement tool. For example, to provide a comprehensive
measure of the dollar costs of various diseases, reliable
economic measures for anxiety, pain and suffering and the
value of human lives would be required. Whilst such
measures do exist to some degree, their validity and
acceptance may be debatable.
All calculations used for this exercise are shown at
Appendix E, and the following discussion explains the
methodology used to estimate:
1. the likelihood (probability) of Queensland consumers
acquiring infectious conditions/diseases from
hairdressing, beauty therapy and skin penetration
procedures; and
2. the potential costs to the community associated with those conditions/diseases.
firstly in relation to non-blood borne infections, and
then in relation to blood-borne infections.
52 The cost estimates provided in this chapter are designed to provide an
indicative estimate of the potential costs that may arise from selected
diseases. It is accepted that the actual costs of each disease will be
dependent on the technology, treatment profiles and the individual patient
characteristics and is likely to vary significantly from the estimates
provided. Nevertheless, the study team believes that these figures provide ball
park estimates of the potential disease costs likely to occur from
hairdressing, beauty therapy and skin penetration activities.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
51
6.1 Non-blood borne infections
As noted in the Risk Assessment Report, non-blood borne
infections associated with hairdressing, beauty therapy
and skin penetration activities include streptococcus,
staphylococcus, ringworm, head lice, fungal infections,
and conjunctivitis (both bacterial and viral). These
conditions are generally non-life threatening, and, under
normal circumstances, are readily treated.
6.2 Likelihood of acquiring a non-blood borne infection
As noted in Section 5 (Risk Assessment), data is collected
for notifiable conditions/diseases (including blood borne
diseases), but is not collected in relation to other, less
serious conditions. Thus there is no available data as to
the frequency of occurrence of the conditions noted above,
and consequently, no calculations have been made as to the
probability of a person acquiring a (non-blood borne)
infectious condition from hairdressing, beauty therapy or
skin penetration procedures.
6.3 Costs associated with non-blood borne infections
As noted above, no data is collected in relation to non-
blood borne infectious conditions arising from
hairdressing, beauty therapy and skin penetration
services, therefore no calculations can be made of the
costs of treatment associated with those conditions.
Anecdotal evidence from industry practitioners and
consumers indicates that the majority of costs arising
from these diseases relate to expenditure on remedial
medication to correct fungal, bacterial and other
infections. This expenditure is generally quite low unless
the infection warrants admission to hospital. The average
length of stay in hospital for severe infectious and
parasitic diseases is 4.7 days.53 Once corrected,
stakeholders suffering from these infectious conditions
are generally returned to full productive capacity in
society.
6.4 Blood borne infections
Blood borne infections include Hepatitis B, C and D and
the HIV/AIDS virus. These infections, which may be
acquired from skin-penetrating procedures, are recognised
as having the most serious consequences; ie. they may
53 Australia‟s Health; Australian Institute of Health and Welfare. 1996 –
www.aihw.gov.au (Accessed dec. 1998)
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
52
result in chronic, debilitating and potentially fatal
illness.
6.5 Likelihood of acquiring a blood borne infection
The probability of a person acquiring a blood borne
infection will vary according to each person‟s
immunological response and lifestyle choices (intravenous
drug use, sexual activity, etc).
In estimating the likelihood of a person acquiring a blood
borne infectious disease, the following methodology was
used:
Step 1:
Firstly, an estimate was made of the number of tattoo,
body piercing and acupuncture services provided in
Queensland each year . As shown in Appendix E, Table 1,
the number of such services that are provided in
Queensland each year is estimated to be around 1,367,200
services.54 Of these 1,367,200 services, only some may
result in the transmission of a blood-borne infection.
Step 2:
Secondly, data from a range of sources was analysed by
the consultancy team to provide an indication of:
(a) current prevalence rates for blood borne
infections in the general community; and
(b) the probability that a person, if exposed to a
blood borne infection, will actually acquire that
infection.
The data analysis indicated that prevalence rates for
blood borne diseases within the general adult community
range from 0.04% for HIV, to 0.50% for HBV and 1.00% for
HCV.55 It has been suggested that prevalence rates for
these diseases may be higher or lower within some groups
of people (eg. intravenous drug users), however, there is
no available data to identify different client groups
within the hairdressing, beauty therapy and skin
penetration industries. Therefore, prevalence rates for
the general adult population have been used in these
calculations, and were shown in Table 5.3.
The data analysis also indicated that the probability of a
person who is exposed to a blood borne disease actually
54 Refer to Section 4 of this report and Table 1 of Appendix E.
55 Communicable Diseases Unit, Queensland Health; 1999.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
53
acquiring that disease is within a range of 0.50% for HIV,
3% for Hepatitis C and 30% for Hepatitis B.56
56 Germanaud J, Causse X, Dhumeaux D. Transmission of HCV by Accidental Needle
Stick Injuries Presse Medical 23 (23): 1078-82, 1994. “Risk of Transmission of
HCV 0-3% and may be up to 10% if patient (donor) is HCV RNA positive up HBV
risk 7-30%”. RACS Policy Document Infection Control in Surgery. Management of
AIDS (HIV) and Hepatitis B. February 1994 Appendix 11 pp14-16. C. Burrell;
Today‟s Life Science. October 1992, p12-16. “HBs Ag eAg pos 106-108 infectious
doses/ml”. Global Program on AIDS. Report of a WHO Consultation on the
Prevention of HIV and Hep B Virus Transmission in the Health Care Setting.
Geneva 11-12 April 1991 WHO p1. “HBV is found in very high titres (often>10x106
ID/ml) 7-30% risk of HBV infection after needle stick exposure. HIV is less
common the virus is present at concentrations of 10-100 ID/ml. <0.5% of HCW
sustaining a needle stick exposure to the blood of a HIV positive patient have
acquired HIV”. Ippolito G, Puro V, Petrosilla N, Pugliese G, Wispelwey
B,Tereskerz PM, Bentley M, Jagger N. Prevention Management of Occupational
Exposure to HIV. Advances in Exposure Prevention. University Virginia USA 1997
p12-13. Courier-Mail, February 3, 1999.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
54
Step 3:
To estimate the number of infections that may occur in
Queensland, the consultancy team multiplied the total
estimated number of tattoo, piercing and acupuncture
services in Queensland (ie, 1,367,200) by the estimates
undertaken at step 2, that is:
(a) the disease prevalence rates in the general
community for each blood borne disease; and
(b) the probability that a person exposed to a blood
borne disease will actually acquire that disease.
These calculations are summarised below:
HIV 1,367,200 x 0.4% x 0.50% = 2.73
persons
Hep B Virus 1,367,200 x 0.50% x 30% = 2050.80
persons
Hep C Virus 1,367,200 x 1.00% x 3% = 410.16
persons
Step 4:
The above figures were then multiplied by the rate of
probability of acquiring a disease from skin penetrating
procedure, ie the probability that equipment used in such
procedures may be contaminated/infected with a blood borne
disease from a previous client.
In estimating the rate of probability, a sensitivity
analysis was undertaken, within a range of 100% (highest)
and 25% (lowest) probability rate that equipment may be
contaminated with a blood borne virus.57 Calculations for
the sensitivity analysis are shown in Appendix E, Tables
3,4,5 and 6.
Those calculations indicate that, using the upper
probability rate of 100% and the lower probability rate of
25%, the number of Queensland consumers who could
potentially be infected as a result of a skin penetrating
procedure, is as follows:
57 Probability range was prescribed by the Legislative Projects Unit and the
Communicable Diseases Unit of Queensland Health; 1999.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
55
Table 6.1: Number of Persons Potentially Infected weighted
by probability of contaminated equipment being used in
skin penetrating procedures Disease Upper probability Range
(ie. 25% of Equipment is
infected)
Lower Probability Range
(ie. 25% of Equipment is
infected)
HIV 2.73 0.68
HBV 2,050.80 512.70
HCV 410.16 102.54
Total Persons 2,463.69 616.92
Source: SKM Economics; Queensland Health 1999
Step 5
When considering the above calculations, it was recognised
that not all blood-borne infections will result in chronic
infection and not all will result in mortality.
Information from the South Australian Department of Human
Services58 indicates that the following rates of chronic
infection/mortality are likely apply in respect of each of
the major blood borne diseases:
Table 6.2: Probability of Mortality and Chronic Infection
for selected bloodborne diseases. Disease Probability of Chronic
Infection
Probability of Mortality
after chronic infection.
HIV 100% 100%
HBV 10% 25%
HCV 75% 10%
Source: SA Department of Human Services, 1998
The above information is also shown in Appendix E, Table
7.
6.6 Costs associated with Blood borne Infections
No definitive costs for treating each of the above
diseases was available to the consultancy team, however
information was obtained from a range of agencies to
provide an indication of treatment costs for blood borne
diseases.
According to the Australian Institute of Health and
Welfare, the annual cost of blood borne diseases in 1993-
94 was approximately $401 million for the nation as a
whole.59 This low total cost reflects the fact that the
58 What Have You Got? South Australian Department of Human Services, 1998.
59 Disease Costing Methodology used in the Disease Costs and Impact Study; 1993-
94. Australian Institute of Health and Welfare; 1994.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
56
majority of costs associated with blood borne diseases are
indirect human capital costs (eg. pain and suffering,
employment/family/social impacts), which are not
incorporated within these figures.
A study conducted by Susan Hurley et al. indicated that,
for HIV, the direct life time treatment costs in Australia
in 1992-93 was approximately $93,000 per patient.60
60 Lifetime cost of human immunodeficiency virus-related health care – Susan
Hurley et al. Published in Journal of Acquired Immune Deficiency Syndrome Human
Retrovirology; August 1996:12(4)-Pp. 371-8
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
57
Information obtained from a range of sources indicates
that the costs of treatment for Hepatitis B infections are
$2,230 for each chronic case and $128,900 for each case
resulting in mortality (death).61 The costs of treatment
for Hepatitis C are $48,728 for chronic infections and
$62,599 for cases resulting in mortality in the last two
years of treatment.62
The above costings, together with probability rates of
infected equipment, were factored into the calculations
shown in Appendix E (Table 10) with the following results:
Table 6.3: Potential Total Disease Costs weighted by
alternative probabilities of skin penetrating equipment
being contaminated with infected blood.
Probability of Equipment
Contamination
Potential Total Costs of Treatment
(HIV, HBV & HCV; chronic and mortal
infections)
100% $31.73 million
75% $23.80 million
50% $15.87 million
25% $7.93 million
Source: SKM Economics; Queensland Health 1999
Thus, the costs of treatment of blood borne diseases in
Queensland could be as high as approximately $32 million,
or as low as approximately $8 million.63
The above cost estimates reflect the baseline cost
associated with treating disease. Other costs, such as
reduced work performance due to sickness, mental
stress/anguish, reduction in career opportunities and
other family/social implications, may be incurred by
affected individuals, their families, employers, and by
society in general.
An indication of the potential impact of social costs, in
terms of productive days lost and number of deaths, are
shown in Table 6.4:
61 Disease Costs of Hepatitis B in Australia, 1993. Australian Institute of
Health and Welfare; 1994. 62 Schedule 1 Review of the Public Health Regulations; NSW Department of Health;
1994. 63 Based on equipment contamination probability range provided by Queensland
Health.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
58
Table 6.4: Other Social Costs for HBV per annum (Qld) Disease Number of
Potential cases
Generated
Number of
Potential Deaths
Number of Days in
Lost Productivity
HBV 2,051.10 51.28 6,091.864
Source: Australian Institute of Health and Welfare, 1998; ABS Health Survey
1995.
The Tasmanian Department of Health and Human Services
estimated that indirect human capital costs associated
with HIV are approximately $600,000 for each infected
person, with an estimated annual cost of around $120
million for Tasmania.65
In summary, it is probable that the cost estimates of
between $8 million and $32 million referred to above are
likely to understate the full costs to Queenslanders from
blood borne disease that may arise as a consequence of
skin penetrating procedures. Additionally, cost estimates
may change over time.
6.7 Public benefits from minimising infection risks
The public benefits from controlling the transmission and
spread of infectious diseases/conditions are essentially a
healthier population and, in turn, a potentially more
productive society.
Studies into the costs of disease prevention programs have
often demonstrated the societal benefits through a
comparison of the costs of program and reductions in
incidence rates for those diseases. For example, a study
into the provision of HBV vaccines in the USA indicated
that an annual benefit of around US$555 million was
achieved through the number of cases avoided. 66
In Australia, a similar study was undertaken and found
that the costs of vaccinating all persons against HBV was
approximately $9,729 per person over and above the
screening cost of $354 per person. In contrast, the cost
of a HBV case was estimated at around $2,230 per person. 67
As a result, it was viewed at the time as inappropriate on
cost-benefit grounds to apply a universal vaccination.
However, recent information provided by the Communicable
64 Based on Tasmanian Department of Health and Community Services estimate of
hospitalised days of 2.97, SA Communicable Diseases Unit death rate estimate of
between 25-30% of chronic carriers (ie. 10% of total infections). 65 Regulatory Impact Statement – The Public Health Bill 1996; Tasmanian
Department of Health and Human Services; 1999 – www.dchs.tas.gov.au. 66 Disease Costs of Hepatitis B in Australia; Australian Institute of Welfare;
1993. 67 Disease Costs of Hepatitis B in Australia; Australian Institute of Welfare;
1993.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
59
Diseases Unit of Queensland Health has suggested that
decreasing costs associated with HBV vaccination has
resulted in a universal vaccination policy now being
applied to children.
This illustrates the point that cost-effective measures
are required to minimise the health risks (and associated
costs) of infectious diseases.
In conclusion, there is probability range within which
consumers may acquire infectious conditions/diseases as a
consequence of hairdressing, beauty therapy and skin
penetration services. Without effective government
intervention to minimise those risks, public health costs
could be within a range of $8 million and $32 million.
The next two sections of this PBT Report assess:
the ability of the current legislation (the Base Case)
to effectively minimise the risks (and consequent
costs) of infection from hairdressing, beauty therapy
and skin penetrating procedures; and
the ability of the various legislative reform options
to effectively control the same level and range of
risks.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
60
7. Assessment of the Existing Legislation (Base Case)
7.1 Methodology
In considering the Base Case (current legislation), the
following issues and impacts have been considered:
Legislative Coverage;
Public Health Impacts (including the potential costs to
the community from treating infectious
conditions/diseases);
Impacts on Service Providers;
Impacts on Consumers; and
Impacts on Regulatory bodies.
Each of these issues is addressed below.
7.2 Legislative Coverage
The existing legislation covers participants who fall
within the current definitions of hairdressing and skin
penetration. There are a number of other services that
would appear to be captured under the current legislative
definitions, however regulatory bodies have not in
practice applied the legislation in respect of these
activities, eg. hair implantation, blood transfusions,
cosmetic/party plan demonstrations, finger prick blood
testing, and many other activities.
A significant disadvantage associated with the existing
legislation is that it has not evolved in response to the
changing service profile of the industries affected and
the changing range of activities undertaken within those
industries. For example, some hairdressing businesses
also provide nail/manicure or other beauty services, and
some beauty therapists also undertake piercing and tattoo
activities (eg. cosmetic tattoo). Nor does the current
legislation effectively address some of the new activities
being undertaken, particularly in the body piercing
industry (eg. implantation of substances under the skin).
The current legislation also fails to take into account
the different risk levels associated with different
activities, that is, it places the same level of
legislative requirements on all hairdressing, beauty
therapy and skin penetration businesses, regardless of the
differing level of risks associated with the various
activities. An alternative approach to legislative
coverage by industry definitions could be to focus on
activities, and (consistent with the conclusions of the
Risk Assessment Report) to legislate in respect of various
types of activities according to their level of risk.
Many stakeholders indicated a preference for such an
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
61
approach, which received strong support from submissions
to the review.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
62
7.3 Public Health Impacts
As described in Chapter 3, the current legislation
requires that premises used for hairdressing, beauty
therapy and skin penetration (as defined) must be
licensed/registered with local government authorities, and
must meet specified building requirements. The
legislation also prescribes hygiene standards for the
conduct of those businesses, and methods of cleaning,
disinfecting and sterilising equipment. It is possible
that the existence of the current legislation encourages
business owners and operators in these industries to take
some precautionary steps to minimise infection risks.
However, the current legislation has no requirements in
relation to standard infection control precautions or in
relation to infection control training for operators.
Those issues (as noted in section 5 concerning the Risk
Assessment Report) are considered to be the key factors in
reducing risks to the public from infectious
conditions/diseases.
In the absence of legislative requirements in relation to
recognised infection control precautions or mandatory
infection control training for operators, there is no
evidence that the current legislation effectively reduces
the risks of infectious conditions/diseases. This
suggests that the potential savings to the community from
the current legislation are minimal, and may be little
different than under an unregulated environment.
The costs of disease that may arise under this model could
be between $8 million and $32 million (depending on the
assumptions made as to the probability that skin
penetrating equipment could be contaminated with a blood
borne disease and the degree of prevalence of such
diseases in the adult community).
7.4 Impacts on Service providers
7.4.1 Compliance Costs
Compliance costs for service providers under the Base Case
comprise the licensing/ registration costs, building and
maintaining business premises, and complying with other
legislative requirements.
Licensing costs for hairdressing and beauty therapy
premises range from between $70 and $140 (depending on the
local government body), while a standard $200 registration
fee is charged for skin penetrating premises. On a
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
63
Statewide basis, this would total approximately $282,000
for hairdressing/beauty therapy premises, and $160,000 for
skin penetrating premises, ie a total of $442,000.68
68 Calculated on the basis of the number of registered premises multiplied by an
average fee of $105 for hairdressing/beauty therapy premises and $200 for skin
penetration premises. Does not include the cost of meeting premise requirements
stipulated by the existing legislation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
64
There are also costs associated with building and
maintaining business premises to the standards set out in
the legislation and it has been suggested that these
impose significant costs on business participants.
However, an analysis of construction costs for various
hairdressing, beauty therapy and skin penetrating
practices suggests that primary costs (ie costs that would
be incurred irrespective of whether the legislation
existed or not) are between $20,000 and $25000, and may
not change significantly even if no legislation existed.69
It appears that the primary factors influencing the design
and building of a practice are determined by consumer
preferences. Businesses such as beauty therapists, which
seek to attract higher income, more affluent customers,
tend to spend more on the fit-out of their shops/salons.
In contrast, those businesses that deal with customers who
are more interested in expediency and convenience (eg.
hairdressing services) appear to spend less on building
fit-outs.
In practice, the legislation is imposed primarily on those
businesses that clearly fall within the definition of
hairdressing, beauty therapy and skin penetration, and is
most commonly applied to those businesses that apply to
have their premises licensed/registered. It is not widely
applied to those businesses that elect to operate outside
the law (eg. “backyard” operators).
The base case legislation is not consistently applied to
many other businesses that provide hairdressing, beauty
therapy and skin penetration services (eg. department
stores, “party plan” operators, cosmetic demonstrators,
hair implant salons, natural therapists and others who
provide acupuncture services or “finger prick” blood
tests, etc). Furthermore, providers such as doctors,
dentists and physiotherapists are exempted from the
legislation when providing services “in the conduct of
their profession”.
Therefore, whilst the cost burden imposed on service
providers in meeting the current legislative requirements
may be reasonably low, there is an unfair competitive
advantage to providers who supply similar services but to
whom the legislation is not generally applied.
69 Industry Feedback on the costs incurred to build premises to attract clients
and facilitate the provision of the services. Industry stakeholders suggested
that that actual cost of compliance with the existing legislation was between
$5,000 and $15,000 depending on individual Council requirements. Refer to
Section 4 for discussion on shop fitouts.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
65
7.4.2 Restrictions on competitive conduct
As noted above, the current legislation requires business
premises to be licensed/registered, and requires premises
to be constructed and maintained to specific standards.
The current legislation contains barriers to the provision
of mobile services under the current legislation.
Hairdressers may apply for a mobile hairdressing licence,
but the provisions for such licensing are not clear, and
have been interpreted and applied differently in different
local government areas. There are no provisions for mobile
skin penetrating services.
Many providers view government-imposed standards as an
important element in ensuring that the industry‟s
reputation, services and/or product quality are maintained
and that public confidence is preserved. In addition, many
providers in established businesses consider that
government imposed requirements, (including premises-based
requirements) are a useful barrier to competition from
unregistered “backyard” operators and/or unregistered
“mobile” operators.
However, it is important to distinguish between
competition issues and public health issues. The Risk
Assessment Report concluded that there is no causal
linkage between premises and the transmission of
infections within the hairdressing, beauty therapy and
skin penetration industries, and that standard infection
control precautions (and appropriate operator
knowledge/skill) are the most significant factors in
reducing infection risks. Consequently, there is no
health-based justification for restricting mobile
services.
A consumer‟s decision to select one provider over another
will most frequently depend on the needs and preferences
of the consumer. Consumers of mobile services are often
aged, disabled or infirm and/or people who lack transport
and who cannot access premises- based service providers.
Consumers in rural and remote areas, who lack access to
business centres and “fixed location” service providers,
may also be consumers of mobile services. In addition,
some consumers of mobile services may be people on higher
disposable incomes seeking the convenience of a mobile
operator.
As noted in Section 7.4.6, the base case legislative
requirements are not applied consistently to all service
providers. Some health practitioners, for example, may
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
66
provide similar services (eg. acupuncture, piercing) but
are currently exempted from the legislation . In
addition, there is anecdotal evidence of significant
participation by unregistered practitioners in the
hairdressing, beauty therapy and skin penetration
industries.
As a result, some practitioners have the advantage of not
being required to meet the licensing fees/costs (ranging
from $70 to $200 per annum) and/or the additional costs of
ensuring that the premises used in the conduct of the
service meet the requirements of the legislation.
In addition to the licensing and premises requirements
described above, the current legislation prohibits persons
with specified infectious conditions/diseases from
providing and receiving services. It does not provide for
precautions to be taken to minimise risks to allow those
persons to provide or receive services as is done under
other legislation and for other occupational groups. Other
providers (eg. medical practitioners), who are exempt from
the legislation in the course of their profession, may
undertake similar activities (eg. acupuncture, piercing),
but are not limited in the scope of services they may
provide and their consumers are not prohibited from
receiving their services.
For example, medical practitioners suffering from blood
borne diseases such as HIV or HBV in Queensland are
allowed to continue to supply non-exposure prone services
provided standard precautions are followed and the
transmission risk is minimised . Similarly (and for
comparative purposes), it is noted that other legislation
such as the Food Act 1989 (Qld) allows infected persons to
undertake activities such as food preparation provided
that precautions are taken to prevent the contamination of
food or food contact surfaces.
The current legislation does not provide a similar
precautionary approach for hairdressing, beauty therapy
and skin penetration service providers. Thus the
legislation is potentially discriminatory against service
providers and consumers of hairdressing, beauty therapy
and skin penetration services, and is in conflict with the
more inclusive approach recommended under the National
Hepatitis C action plan 70. Furthermore, anecdotal
evidence suggests that some services (eg. treatment of
head-lice by hairdressers) could in fact assist in
management of infectious conditions.
70 Economic Anlayses for the Review of the National Hepatitis C Action Plan;
Department of Public Health and Community Medicine – University of Sydney;
August 1998.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
67
In conclusion, there is no evidence to suggest that the
current restrictions on service provision in the
hairdressing, beauty therapy and skin penetration
industries is justified on either health grounds or on a
cost-benefit basis.
7.4.3 Restrictions on equipment used by service providers
The Base Case legislation also contains
restrictions/prohibitions on some procedures and
equipment, eg. shaving with cut throat razors, use of
certain hairdressing/beauty therapy equipment such as
rotary hair-brushes, sponges, powder puffs, neck dusters.
From discussions with stakeholders, it appears that some
currently restricted equipment (eg. rotary brushes) has
not been used, and in fact has not been commercially
available, for more than 30 years. Stakeholders also
provided some anecdotal information about the potential
impact of different materials on consumers and the
probability of post-service infection; however, no
definitive scientific evidence was available to determine
their validity.
Most stakeholders agree that equipment should be
restricted only on the basis of a risk assessment of the
equipment‟s potential to transmit infectious
conditions/diseases. In particular (and consistent with
the Risk Assessment Report), it is considered that skin
penetrating equipment that cannot be effectively
sterilised is likely to generate substantially more costs
than benefits to the public from infectious
conditions/diseases.
7.4.4 Employment Impacts
The current legislation, which focuses on the
licensing/registration of business premises, tends to
favour employment in fixed business locations. There is
only very limited provision in the legislation for local
government authorities to grant a mobile hairdressing
licence, and no provision at all for mobile skin
penetrating licences.
The provision for mobile hairdressing licences has been
interpreted and applied in various ways across various
local government authorities. Industry feedback indicates
that some local authorities will only issue a mobile
hairdressing licence if the proprietor has a fully fitted-
out mobile van, some local authorities will issue a
licence to persons who provide “door to door” hairdressing
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
68
services, while other councils will not issue mobile
licences at all.
Thus the current legislation supports employment in fixed
business locations, and does not facilitate legitimate
employment opportunities for mobile operators.
However, it is widely recognised throughout the
hairdressing, beauty therapy and skin penetration
industries that many unlicensed/unregistered operators are
in fact providing “backyard” services. These unregistered
service providers are generally “sole operators” who may
provide services either from their own homes, in clients‟
homes or in other locations. The current legislation has
not been able to control these “illegal” operators (and it
is unlikely that any form of regulation would ever be able
to prevent home-based or mobile operators).
An external impact under the existing legislation is the
de facto prohibition of training of apprentice
hairdressers by mobile operators. Under the miscellaneous
provisions of the Hairdressers‟ Industrial Award (gazetted
17 September 1993), hairdressers are prohibited from
providing services anywhere except premises registered as
a shop under the Workplace, Health and Safety Act 1990.
This requirement would restrict mobile operators from
employing apprentices and/or other hairdressers, and
effectively restricts mobile hairdressing operators to
sole proprietorship. No similar prohibition appears to
exist for body piercers, tattooists, acupuncturists and
beauty therapists.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
69
Based on the findings of the Risk Assessment Report, which
concluded that premises are not key factor in reducing
infection risks, there does not appear to be any health-
related explanation for restricting the employment of
apprentices by mobile operators. Rather, it appears that
the restriction promotes the existence of larger premises-
based operators, by restricting the capacity of mobile
operators to expand.
A submission to the review from the Department of Training
Employment and Industrial Relations (DETIR) noted that the
hairdressing, personal care and beauty care industries
provides one of the few segments of the employment market
providing substantial employment for women, particularly
“micro” businesses owned by women. DETIR‟s submission
also noted that most segments of these industries operate
on small margins and are considered as one of the more
peripheral home-based enterprises, and that 30% of all
home based operators may be involved in the beauty
services industry. DETIR‟s submission also indicated that
provision of mobile services is essential, for example to
provide services to people with a disability, or lack of
mobility.
7.4.5 Training Impacts
As previously noted, a key conclusion of the Risk
Assessment Report was that infection control knowledge and
skills are the key factors in minimising infectious
diseases/conditions.
There is no requirement under the current legislation for
operators to undergo infection control training, however
it should be noted that Queensland Health has provided
assistance to industry bodies to formulate and establish
infection control training courses/modules. The full
public health benefit of these training courses, however,
may not be captured at present, due to the current lack of
any legislative requirement for operators to undergo
infection control training.
It is considered that further development of appropriate
infection control training courses would enhance training
opportunities for current and potential service providers
and would improve overall workplace skills within the
affected industries. Health outcomes would also be
improved under any regulatory reform model that mandates
infection control training requirements, particularly for
skin penetration activities, which carry the risks of
transmitting blood-borne diseases (and which impose the
highest costs on society).
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
70
7.4.6 Application of the current legislation to service
providers
There is anecdotal evidence that the application of
current legislative requirements is inconsistent between
different local government areas, resulting in potential
cost advantages accruing to service providers in some
areas, and cost disadvantages in other areas. The most
useful example of this inconsistency is in respect of
mobile operators.
In some local government areas, mobile operators are
required to conduct their businesses from a licensed
mobile vehicle, eg. a caravan fitted out to the
satisfaction of the local authority. In other areas,
however, they may provide their services without such a
licensed vehicle. In some jurisdictions, mobile operators
have been banned from operating altogether, potentially
forcing them to operate illicitly.
As previously discussed, from an infection control
perspective, there appears to be little justification to
exclude particular providers from providing services the
public on the basis of their premises, provided they
comply with appropriate infection control requirements.
Many health practitioners (eg. doctors, nurses) provide
“mobile” services to the public, ie health services are
provided in the patient‟s home.
Further, as identified earlier, the requirements to
licence business premises ignores the primary determinant
of infection risks, notably, operator knowledge and skill
in applying infection control practices.
7.5 Impacts on Consumers
7.5.1 Consumer Protection
On the basis that the current legislation does not address
the key factors in minimising infection risks to the
public, it could be argued that the base case affords
little protection to consumers. As a consequence, the
potential costs to society from blood-borne diseases are
not minimised.
Therefore, in the event of regulatory failure (ie when an
infection does occur), consumers bear not only the costs
incurred from correcting the infectious disease/condition,
but must also bear the costs of seeking restitution
through the court system.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
71
Thus, it would appear that consumers do not benefit from
effective disease control under the current legislation,
and are arguably only marginally better off than under no
regulation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
72
While there is no formal mechanism for consumer complaints
under the current legislation, consumers may provide
information to local government authorities about breaches
of the current legislation if they are aware of them.
There are no remedies available to consumers under the
existing legislation; that is, consumers must process any
damages claims they may have through the justice system,
where the onus of proof is on the plaintiff . However, it
should be noted that this issue does not change under any
of the proposed regulatory reform options.
7.5.2 Consumer Costs/Savings
Hairdressing, beauty therapy and skin penetration services
purchased by consumers are discretionary in nature, and
demand for these services therefore reflects lifestyle,
income and trends in society as a whole.
It is probable that consumers bear the majority of any
compliance costs imposed on service providers through the
legislation. The annual costs in Queensland would be in
the vicinity of $282,000 for hairdressing services and
$160,000 for skin penetrating activities.71
Some services (eg. tattoo, piercing, and beauty therapy)
do not appear to be price-sensitive, ie. consumers seeking
those services will purchase them regardless of the cost
of service. The costs of compliance on service providers
appear to be passed on to consumers through the pricing of
services, with little or no effect on consumer demand.
Hairdressing, however, appears to be more competitive and
price sensitive as a whole and as such, is more prone to
price variations. There is a general perception that
service providers in the hairdressing sector are limited
in the amount of compliance costs that will be borne by
consumers. The wide disparity in pricing between
hairdressers suggests that a marked level of product
differentiation occurs and that, in some cases, it may be
possible to pass on some or all of the compliance costs
incurred by service providers.
The primary benefit accruing to consumers from legislation
governing hairdressing, beauty therapy and skin
penetration businesses is a reduction in the level of risk
associated with the activity undertaken by those
businesses. Figure 6.1 illustrates the potential cost-
71 Calculated on the number of premises multiplied by an average cost of $105
for hairdressing/beauty therapy and $200 for skin penetrating. Excludes premise
construction costs.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
73
benefit trade-off between the costs of regulation and the
level of risk assumed by society.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
74
Assuming all risks are fully identified and valued by
consumers, consumers would maximise their benefits when
the cost of incurring the diseases is no greater and no
less than the cost of implementing the regulation. This is
illustrated by R*C* in Figure 6.1. Any position outside of
this point would push the consumer up the total cost curve
by either incurring excessive disease cost risk or
excessive regulation costs.
Figure 6.1 Risk Cost v Regulatory Cost-Benefit Trade-off72
Level of Regulation
Cost
Disease
Cost
Cost of
Regulation
Total Cost
R*
C*
C0
0
7.5.3 Consumer Choice and Access
Consumer choice and access to services are central
features of a competitive market. Both elements are
restricted under the current legislation.
As previously discussed, the current legislation prohibits
providers from providing services to persons with
infectious diseases/ conditions. The legislation does not
make any allowance for preventative measure, eg. wearing
of gloves when treating consumers with infectious skin
conditions, double gloving when providing services to
72 C
0 represents the costs to society if no regulation existed; R*C* represents
the optimal combination of regulation and disease costs imposed on society.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
75
consumers with blood borne diseases. Thus, consumers
appear to be unnecessarily prevented from receiving
services under the current legislation.
Further, the current restrictions imposed on mobile
operators reduce consumer access to services. These
restrictions impact on consumers who are aged or infirm,
or who lack transport to business centres, and on persons
who prefer a mobile service. The restrictions also impact
significantly on consumers in rural and remote areas, who
may not have ready access to “fixed” business premises.
There is no data to suggest that consumers incur
additional health risks when mobile services are provided.
It is considered that all service providers should comply
with appropriate infection control standards, regardless
of the method of service delivery. In this way, and
provided consumers are aware of the level of risk
associated with a hairdressing, beauty therapy or skin
penetration service, then consumers can make their own
assessment of the costs and benefits associated with
different forms of service delivery.
7.5.4 Other Consumer Issues
7.5.4.1 Antidiscrimination considerations
It has been suggested that the current restrictions on
providers and consumers with infectious
diseases/conditions could be in breach of anti-
discrimination policies and legislation.
In its submission to the review, the Anti-discrimination
Commission noted that there are exemptions under the
Antidiscrimination Act 1991 for discriminatory acts on the
basis of public health or workplace health and safety.
However, the Commission commented that these exemptions
could be hard to justify if there are alternatives to
managing the risk of infectious diseases/conditions
arising from the affected activities.
A Commonwealth Health & Aged Care submission also
commented on the National HIV/AIDS Strategy and the
National Hepatitis C Action Plan which aims not only to
eliminate those diseases, but also to minimise the
personal and social impacts of those diseases. These
impacts can include stigma and isolation in the lives of
people with those conditions, and discrimination against
them when accessing to services.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
76
7.6 Impacts on Regulators
7.6.1 Costs
The principal costs for regulators are those associated
with developing, maintaining, enforcing and reviewing the
legislation. In addition, other costs associated with the
legislation may be incurred by, for example, the justice
system, consumer affairs and other public sector areas.
The costs of developing, maintaining and reviewing
legislation are unclear. For example, the budgeted annual
cost of Queensland Health‟s legislative area is in the
vicinity of $990,000,73 with additional funding available
for special projects such as the current legislative
review. However, this budget estimate represents all
legislative issues affecting Queensland Health, including
the costs of this legislative review.
Submissions from local government authorities did not
provide information about the costs to them of monitoring
and enforcing the current legislation. It is recognised
that these costs may difficult to estimate, since local
government officers generally monitor and enforce a number
of pieces of legislation, therefore it is not possible to
separate individual costs. However, a number of local
government submissions did comment that
licensing/registration fees imposed on businesses are
necessary to support the costs of inspections, audits and
(where necessary) prosecutions. Some local government
authorities also noted that the regulatory time lags
associated with processing notices and following up
actions seem to act as a disincentive for some local
authorities to strictly enforce the legislation.
Industry stakeholders have commented that local
governments do not appear to take an active role in
respect of monitoring and enforcing legislative
compliance, and there appears to be a view amongst
stakeholders that they were not receiving „value‟ for
their licensing/registration fees. A recent survey by
Queensland Health of local governments and public health
units also indicated few if any prosecutions have occurred
for breaches of legislation in recent years.74 A
subsequent survey of Public Health Units concerning
complaints and investigations similarly indicated a
limited number of complaints and investigations had been
73 Queensland Health – Finance Division, 1999
74 Queensland Health – Communicable Diseases Unit, 1998
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
77
conducted in relation to infection issues in the
industries under review.75
75 Queensland Health – Legislative Projects Unit, 1999
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
78
It appears from the feedback obtained from Councils and
information from Queensland Health, that the majority of
data collection occurs in manual file format which is both
tedious and time consuming to review. As noted by Brisbane
City Council in its response to a project survey, this
problem appears to be a function of the resources assigned
to the administration of the legislation and the
historical development of some administrative systems.
It is questionable whether the current methods of
enforcement deliver any net benefit to the public, given
that a “premises” focus does not appear to provide any
effective control over factors implemented in the
transmission of infectious diseases/conditions. This may
be further compromised by lack of knowledge and
understanding of the infection risks associated with the
industries and their activities on the part of enforcement
officers, and by the apparent duplication of investigation
and review by public health units of Queensland Health.
As a result, it is probable that the net effect of the
existing legislation to regulators is negative. Expenses
incurred in enforcing the current legislation have imposed
opportunity costs on society without any corresponding
increase in public health benefits.
7.6.2 Ease of Administration
Some of the administrative advantages of the current
premises licensing approach include that it:
Provides a record of registered premises locations;
Facilitates contact with service providers by recording
business names, details and activities performed at
premises; and
Provides a means of raising revenue for local
government to fund the investigation, audit and
prosecution of service providers.
Key benefits associated with local government enforcement
of the legislation are the wide distribution of local
government authorities across the State, as well as the
economies of scale they can achieve through monitoring and
enforcing numerous pieces of legislation.
Further benefits arise in some areas (eg. Toowoomba City
Council and Redland Shire Council), when councils and
industry stakeholders combine to promote local awareness
and understanding of the risks of infectious
diseases/conditions, and effective means of minimising
those risks.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
79
It has been claimed that an advantage of the current
system is associated with the licensing and registration
system for premises. This system theoretically allows
regulators to maintain a record of who is conducting
particular activities and where they are located.
However, anecdotal evidence indicates that there are
numerous individuals or groups who are not
licensed/registered, and who do not comply with the
existing legislation.
Such legislative avoidance, however, can never be fully
overcome under any regulatory model, since it is probable
that there will always be some people who elect to operate
outside the law. Local government authorities face
significant difficulties with such operators, not only in
identifying “illegal” operators, but also in successfully
prosecuting them, since they may move on, and since
consumers may often be reluctant to act as witnesses
during prosecutions.
7.7 Assessment of Existing Legislation (Base Case)
The current legislation, which focuses on industries
rather than activities, is not responsive to contemporary
issues in the provision of hairdressing, beauty therapy
and skin penetration services.
The current legislation does not address the key factors
needed to reduce infection risks to the public, ie
knowledge/skill in applying infection control standards.
Therefore, the potential costs to the community arising
from infectious diseases/conditions under the current
legislation are unlikely to be significantly different to
an unregulated model.
The current restrictions on competition within the
affected industries appear not only to reduce the scope of
services that may be provided, but also to reduce consumer
choice and access to such services. Furthermore, some
restrictions are potentially discriminatory in nature.
The costs of monitoring and enforcing the current
legislation are not balanced by benefits to public health.
Overall, there is no net benefit to the community from the
current legislation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
80
8. Assessment of Reform Options
8.1 Methodology
The assessment of reform options is based on the same
process applied to the Base Case.76 In this manner, the
costs and benefits of each reform option are separately
identified and assessed in terms of relative advantages
and disadvantages over the Base Case (discussed in Section
7).
The reform options considered are:
Option 1: No Regulation
Option 2: Negative Licensing
Option 3: Two-tier approach (ie, licensing for high
risk activities plus negative licensing for
low/moderate risk activities]
Option 4: Premises licensing + Code of Conduct
Option 5: Premises licensing plus licensing of
individuals
As was done with the Base Case, each of the above options
has been considered in terms of the following impacts:
Impacts on Public Health
Impacts on Service Providers
Impacts on Consumers
Impacts on Regulatory bodies
The above options have been compared to identify which
option maximises the net benefit to the community. An
overall assessment of the five options is undertaken at
Section 8.8, and a summary is presented in Table 8.2.
8.2 OPTION 1: NO REGULATION
Under Option 1, there would be no regulation of
hairdressing, beauty therapy or skin penetration services.
However (as with the Base Case and other regulatory
options), other, non-industry specific legislation (e.g.
Workplace Health and Safety Act 1995, Trade Practices Act
1975), would remain in place.
The “no regulation” model is generally considered to be
suitable for circumstances where there are no concerns
about public health risks associated with the activities
undertaken.
76 The „Base Case‟ is essentially the scenario that would occur if there were
no changes to the current situation. It is a point in time extrapolation of
the current conditions.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
81
However, concerns do exist about the potential risks of
infectious diseases/conditions from these services, and,
under a “no regulation” model, public health risks could
be increased.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
82
It appears to be generally accepted amongst stakeholders
and the community that skin penetrating activities, which
generate significant risk of infectious
diseases/conditions, pose health risks to the community,
and that legislation aimed at reducing those risks is
justified on that basis.
8.2.1 Public Health Impacts
As discussed at Section 6, an assessment of the costs
associated with infectious diseases indicates that there
is a potential annual cost to society of between $8
million and $32 million77 associated with treating blood-
borne diseases that may arise from skin-penetrating
activities.
Under a “no regulation” model, there would be no framework
for reducing the risks (and associated costs) of
infectious conditions/diseases. Thus, a “no regulation”
model cannot effectively reduce the potential risks to
public health, and thus treatment costs could be at the
highest range noted above, ie $32 million.
This cost exposure is somewhat comparable to the Base
Case, given the apparent lack of effectiveness of the
current legislation in addressing identified risk factors
(eg. infection control training, knowledge and skills for
service providers). However it could be argued that the
mere existence of the existing legislation provides a
level of awareness among providers and the community that
results in some reduction in public health risks.
8.2.1.1 Public Health Education and Awareness Programs
It is probable that service providers would be the major
beneficiaries under a “no regulation” model, since they
would no longer bear any licensing or legislative
compliance costs. However, some regulatory savings could
also be made by government agencies, which would no longer
bear the costs of developing, monitoring, enforcing and
reviewing legislation. Regulatory savings could
potentially be redirected towards public health education
and awareness programs designed to improve provider and
consumer awareness of risks associated with the
hairdressing, beauty therapy and skin penetrating
services.
Health promotion and disease prevention programs have
received significant emphasis in recent years.
77 Refer to Appendix E for an illustration of the disease costing calculations,
which are based on the allocation of direct and indirect health expenditure
across disease types based on incident rates and other factors.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
83
Specifically designed preventative campaigns such as the
national AIDS program, anti-smoking campaigns and the
National Campaign Against Drug Abuse all provide examples
of effective mechanisms for promoting community awareness
and in turn, contributing to the reduction in health
costs.
An effective public health education and awareness program
could, potentially, generate a greater net public benefit
than the maintenance and application of the existing
legislation.
However, while health promotion and education activities
are highly desirable, by themselves they would not be
sufficient to effectively minimise the risks of infectious
conditions/diseases that may arise from the activities
under review.
8.2.2 Impacts on Service Providers
8.2.2.1 Compliance Costs
Under a “no regulation” model, service providers would
have no legislative compliance costs. However, it could
be argued that these cost savings may be negated if there
is a subsequent increase in the incidence of serious
infectious diseases, and an associated increase in civil
actions by consumers against service providers, ie. for
damages suffered.
8.2.2.2 Restrictions on Competitive Conduct
Under a “no regulation” model, there would be no
restrictions on competitive conduct. Thus, the impacts on
providers associated with the current legislation would be
removed, ie, compliance costs, restrictions on the scope
of services offered, restrictions or equipment used, and
restrictions on mobile operators.
8.2.2.3 Employment and Training
Under a “no regulation” option, there would be no
restrictions on the employment of mobile operators (other
than the current restriction under the Hairdressers
Industrial Award already mentioned in section 7). This
option would thus enhance employment opportunities for
mobile operators.
Business owners operating from “fixed” premises may be
concerned that this would impact on their own employment
prospects, since they have higher overheads and may not be
able to compete with lower prices available from mobile
operators. However, this is a competition issue rather
than a health issue, and there are also issues of consumer
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
84
choice and access, particularly in rural and remote areas,
to be taken into account (see section 8.2.3.3 below).
Since there would be no training requirements under this
“no regulation” option (as with the Base Case), there
would be no impact on training.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
85
8.2.2.4 Self Regulation
Professional associations already exist for each of the
industries under review except body piercing, and there is
no barrier to their continuation under any of the Options
under consideration.
Under a “no regulation” model, competition may increase
between service providers, which in turn may provide an
impetus for the further development of existing industry
bodies/ professional associations and/or the establishment
of new associations. Such an impetus could come from
industry participants seeking to differentiate their
services on the basis of quality, in order to increase
market share and maximise revenue.
Stronger industry bodies could develop standards that are
acceptable to the broadest segment of practitioners, and
which also reflect the minimum acceptable level of quality
to consumers. In turn, this may help to create a more
informed market.
Under a self-regulatory approach, professional
associations or industry bodies would be responsible for
developing, administering and monitoring appropriate
standards. An example of this arrangement is the
Australian Acupuncture and Chinese Medicine Association
(AACMA), which has specific membership criteria, and which
has developed comprehensive infection control guidelines
for use by members providing acupuncture services.
Not all industry bodies/professional associations,
however, would have the resources to effectively monitor
all members across the State.
A stronger emphasis on industry self-regulation, however,
could result in higher membership fees being levied on
members as industry bodies undertake the roles (e.g.
audit, investigation, education and enforcement)
previously fulfilled by regulators under the current
system. Thus it is possible that the savings to providers
from the removal of legislative compliance costs could be
outweighed by cost increases from industry self-
regulation, since industry bodies are unlikely to be able
to match the scale efficiencies of existing regulators.
Additionally, membership of industry associations is
voluntary (not compulsory), so does not cover all
participants in the market. Furthermore,
industry/professional associations do not have the same
enforcement powers as government regulatory agencies. For
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
86
example, an industry association could, as a last resort,
“expel” a member for non-compliance with industry
standards, but could not impose statutory penalties as can
be done under a regulatory scheme enforced by government
agencies.
8.2.3 Impacts on Consumers
8.2.3.1 Consumer Protection
Hairdressing, beauty therapy and skin penetration services
are used by a significant number of Queensland consumers
although some services (eg. hairdressing) are probably
accessed more frequently than other services (eg. body
piercing).
Given the discretionary nature of many activities under
consideration (eg. piercing, tattooing), it could be
argued that consumers are more likely to have undertaken
their own assessment of the costs and benefits associated
with higher risk activities.
However, anecdotal evidence and feedback from stakeholders
suggests that most consumers are heavily reliant on the
information provided by service providers. It has also
been suggested that consumer compliance with post-
procedure care is often lacking, and this perception has
been supported by a recent study of medical practitioners
which indicates that the majority of post-piercing
infections are due to poor patient aftercare rather than
inappropriate infection control practices by operators.78
Nevertheless (as with the existing legislation), consumers
are most likely to bear any additional health risk costs
associated with these services. As noted under Section
8.2.1 above, these costs are expected to be marginally
higher under “no regulation” than under the existing
legislation (base case).
Under the “no regulation” option, government regulatory
bodies would have no powers to respond to consumer
complaints or to require operators to comply with specific
standards. Consumer complaints about service providers
would have to be handled by individual service providers
and/or their professional associations.
78 Brian Witherspoon, Toowoomba City Council, Potential Health Complications
Associated with the Positioning and Inadequate Care of Body Piercings,
unpublished,1998
NB: This study, which was based on a survey of 112 general practitioners in
the Toowomba area, does not claim to be conclusive, and notes that it can
only be taken as an indication of trends.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
87
Consumer rights under this model are identical to the Base
Case and all other options; that is, consumers would have
common law rights (e.g. law of tort and/or equity).
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
88
In South Australia, it is proposed to repeal the existing
hairdressing legislation and include hairdressing as a
“prescribed service” under South Australia‟s consumer
legislation. Under this approach, consumer protection is
improved since “prescribed services” have implied
warranties. Thus, if a consumer elects to take legal
action against a hairdresser for damages suffered, there
is no need to first prove that a certain quality of
service was implied/warranted. This approach (which could
be adapted for other services), may be one alternative to
offset potential risks to the consumer and to improve
overall protection, particularly for low risk services.
8.2.3.2 Consumer Costs/Savings
Under Option 1 (no regulation), consumers may benefit from
a reduction in charges for services, as a flow-on from
providers who will no longer have any regulatory
compliance costs. However, these potential savings to
consumers could be offset by correspondingly higher social
costs associated with increased disease transmission
risks. Whilst this increase in disease costs may only be
marginal in relation to the Base Case, it could be quite
significant when compared to the net outcome (ie. disease
costs vs. costs of regulation) of Option 3.
8.2.3.3 Consumer Choice and Access
Under Option 1, consumer choice and access would be
totally unrestricted by government intervention. Instead,
the choice and depth of services would be determined
through market forces.
8.2.4 Impacts on Regulators
Under a “no regulation” model, government bodies would
incur no costs for the development, maintenance,
enforcement or review of legislation. These cost savings
could, however, be offset by additional government
expenditure on public health education and promotional
programs, and, potentially on increased costs of treating
disease.
The lost revenue stream associated with
licence/registration fees payable to local government
authorities under the current legislation would appear to
be offset by reduced regulatory costs for those local
authorities. No impacts on the employment of government
officers would be anticipated under a no regulation model,
as officers engaged in regulatory monitoring and
enforcement of the current legislation also undertake a
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
89
range of other regulatory tasks associated with other
legislation.
The primary savings to regulators from Option 1 are likely
to be the costs of undertaking legislative reviews such as
this study in the future. This could result in a saving of
around $500,000 every 10 years.79
8.2.5 Assessment of Option 1
The maximum benefit from a “no regulation” model is gained
when the risks associated with any given activity is low,
since market forces will dictate the optimal standard to
minimise risks and attract custom. As such, this option is
best suited to the lower and no risk activities.
However, the application of an unregulated model for
higher or moderate risk activities is likely to generate
significant adverse health consequences, with direct costs
potentially reaching up to $32 million per annum.80 Thus,
it would appear inappropriate to implement such a system
for moderate/higher risk activities.
Submissions to the review did not support this Option.
One submission (from a total of 75) proposed a combination
of Options 1 and 2.
8.3 OPTION 2: NEGATIVE LICENSING
Under this option, operators would not be required to hold
a licence, but would be required to undertake activities
in accordance with specified legislative requirements.
Failure to comply with such requirements would result in
sanctions such as the imposition of statutory penalties
(e.g. fines], or could result in an enforcement body
applying to a Court for an Order to prohibit an operator
from undertaking a specific activity or from participating
in the market.
8.3.1 Legislative Coverage
A negative licensing approach could focus on activities
undertaken, rather than on the definition of individual
industries as occurs under the Base Case. Thus, any
business or person (regardless of their industry
definition) who undertakes an activity captured under the
legislation would be automatically covered by the negative
licensing requirements. An “activity based” approach,
which is recommended in the Risk Assessment Report, is
79 Department of Natural Resources estimate of individual legislative review
costs (direct and indirect) under the PBT framework. 80 Refer to Section 6 earlier in report and/or Appendix E for more
information on disease costing.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
90
better suited to current and ongoing changes in service
structure and consumer preferences for various activities.
A negative licensing model could target different
services/activities according to their level of risk, in a
similar manner to that proposed under Option 3. For
example, negative licensing legislation could impose
standard infection control requirements for all operators,
with additional requirements (eg. infection control
training) for higher risk operators. Thus, Option 2 has
the potential to provide a better targeted and less
restrictive outcome than the existing legislation, which
applies to all hairdressing, beauty therapy and skin
penetration premises, regardless of the level of risk
posed.
This approach also provides greater legislative
flexibility and effectiveness. Legislation that is
targeted at activities rather than industries, for
example, could include a provision to enable guidelines to
be made in relation to various activities (or categories
of activities). Such guidelines can be more readily
updated when there are changes in activities or infection
control practices. This would improve legislative
responsiveness and cost-effectiveness.
8.3.2 Public Health Impacts
Under a negative licensing approach, it is probable that
the effectiveness of the legislation would be greater than
that of the existing legislation (base case), since, as
noted above, the legislation could establish higher
infection control requirements on activities that generate
the highest public health risks. For example, the
legislation could require higher risk (ie skin
penetrating) service providers to undertake infection
control training prior to providing higher risk services.
A negative licensing model with effective infection
control requirements could deliver a lower level of
societal risk from infectious diseases/conditions that
that delivered under an unregulated market or under the
existing regulatory arrangements (Base Case).
However, a negative licensing model is primarily a
reactive, complaints based model rather than a proactive
model, so it may not provide a sufficiently high level of
protection to the public from higher risk activities which
are associated with blood-borne diseases.
The negative licensing model as outlined in the Queensland
Health Discussion Paper is considered to be best suited
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
91
for those activities that give rise to lower and moderate
infection risks, but not for those that give rise to
higher risks (ie. skin penetration procedures).
8.3.3 Impacts on Service Providers
8.3.3.1 Compliance Costs
Under Option 2 (negative licensing), service providers
would no longer have to pay licence or registration fees.
However, service providers would still bear the costs
associated with complying with the infection control
requirements of the legislation.
Compliance costs under a negative licensing model are
therefore expected to be lower than the compliance costs
of the current legislation (Base Case), and higher than
under Option 1 (the “no regulation” model). However
compliance costs under Option 2 could increase if
mandatory training requirements for higher risk operators
are included, in which case, the costs of Option 2 could
be similar to Option 3 (the two-tier model described in
Section 8.4).
8.3.3.2 Restrictions on Competitive Conduct
The introduction of a negative licensing model would
remove the restrictions on trade currently imposed by the
existing legislation, eg. restrictions on mobile
operators. All service providers would be able to provide
services, provided they complied with infection control
standards specified in the legislation.
8.3.3.3 Employment and Training Impacts
Since there would be no restrictions on mobile operators
under a negative licensing model, employment opportunities
for mobile operators could increase under this Option (as
under Option 1).
Business proprietors operating from fixed premises may
argue that this will impact on their own employment and
that of their employees, since mobile operators may have
lower business overheads and thus be able to provide more
competitively priced (and/or more convenient) services to
the public. However, this argument is a competition-based
argument and has no health-based foundation, ie. it is not
based upon an assessment of health risks.81
If training requirements for higher risk operators are
mandated as part of the negative licensing model, training
81 The Risk Assessment Report concluded that infection control training and
practices, rather than premises requirements, are the most significant factor
in reducing infection risks.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
92
opportunities and workplace skills within the affected
industries could be enhanced.
It should be noted that the imposition of a training
requirement for higher risk operators might have an impact
on part-time employees, depending on the extent to which
the costs of training are outweighed by the income
generated from higher risk activities. However, it is
anticipated that this impact would be minimal, due to the
small number of participants who undertake higher risk
activities.
8.3.4 Impacts on Consumers
8.3.4.1 Consumer Protection
Consumers generally incur the majority of costs and
benefits associated with any regulatory model associated
with service provision. Under a negative licensing model
focused on activities, consumers are likely to face a
lower level of risk from infectious diseases/conditions in
comparison to the existing legislation (Base Case) and
under a no regulation model (Option 1).
The use of statutory sanctions to enforce legislative
provisions under Option 2 may provide a behavioural
incentive to service providers to conform to prescribed
infection control standards or guidelines. However,
statutory sanctions under a negative licensing model are
generally reactive, ie they are usually applied only after
non-compliance has occurred, which could have significant
health implications for consumers, particularly in
relation to higher risk activities which generate the risk
of blood-borne infectious diseases.
Consumer rights under Option 2 would be identical to other
options, ie common law rights. In addition, consumers
could make complaints or provide information to
enforcement agencies about businesses that do not comply
with prescribed infection control standards.
8.3.4.2 Consumer Costs/Savings
As noted earlier, the introduction of a negative licensing
framework could generate a small reduction in the cost
structure of service providers. However, the rate of
flow-on reductions in the cost of services to consumers is
dependent on the concentration of suppliers and level of
price competition between service providers.
For hairdressing services, the savings arising under
Option 2 from lower compliance costs (albeit marginal) and
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
93
the removal of restrictions on service provision should
occur relatively quickly.
Conversely, savings in the tattoo and body piercing
industries are unlikely to flow immediately, as customers
are generally less price sensitive and operators target
particular niche markets.
Nevertheless, it is possible that all consumers could
receive a small proportional benefit from decreasing the
compliance costs of service providers.
Additionally, access to services will improve under this
model, as existing requirements restricting the provision
of services would no longer exist.
8.3.4.3 Consumer Choice and Access
Limitations on the conduct of mobile operators under the
Base Case (current legislation) have significant impacts
on consumer choice and access, particularly for rural and
remote communities, the disabled, the infirm, the aged and
those who lack transport, as well as those for those who
simply prefer a mobile service.
The removal of such limitations under this model (Option
2) would enhance consumer choice and access for all
services provided by the hairdressing, beauty therapy and
skin penetration industries.
Therefore, consumers are likely to benefit significantly
under Option 2, in comparison to the Base Case as well
Options 4 and 5.
8.3.5 Impacts on Regulators
8.3.5.1 Costs
Government regulatory bodies could benefit from the
administratively simpler approach of a negative licensing
model; however, they could also experience negative
impacts including higher regulatory costs associated with:
Loss of registration/licence fees (which currently
subsidise enforcement costs);
Increased monitoring costs due to a potential increase
in the number of participants covered by the
legislation (as a result of the easier business
establishment process); and
Difficulties in locating and identifying operators.
Given the loss of income from licensing/registration fees,
it is not surprising that submissions from many
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
94
enforcement bodies did not support a negative licensing
model.
However, regulatory costs could be offset under this model
by imposing “user-pays” charges for inspections/audits of
relevant businesses (ie, instead of the traditional
licence fees). That is, when local authorities inspect a
hairdressing, beauty therapy or skin penetration business,
they could charge an inspection/audit fee, with further
inspections/fees applied only in cases of non-compliance
with legislative requirements.
Regulatory costs could also be reduced if increased
competition within the industries provided an additional
stimulus for the establishment of industry bodies to
establish standards that would differentiate their
products and provide an adequate level of protection to
consumers from infection risks. However, there is no
certainty that this would occur.
8.3.5.2 Ease of Administration
A disadvantage for regulatory bodies under a negative
licensing model may be that of not having a ready record
of business operators providing relevant services, and
where those businesses are located. It should be noted,
however, that under the current legislation (Base Case),
enforcement bodies generally only have records of
participants who comply with the legislation, ie those who
register their business premises. Unregistered “backyard”
and/or mobile operators are not generally monitored,
because no record is held of their activities.
It could be possible under a negative licensing model to
require providers to notify regulators of their
activities, however this would depend to a large extent on
voluntary compliance by service providers and/or by
significant proactive monitoring by regulators to “track
down” non-compliant providers.
The costs of proactive monitoring would not be offset by
licensing or registration costs, since these do not apply
under a negative licensing approach.
It is possible that professional associations, or an
independent audit organisation, could conduct audits of
the various market participants. However, the
effectiveness of that approach would depend on (a) the
establishment and approval of suitable audit
organisations; (b) the willingness of participants to
engage (and pay for) external organisations to undertake
such audits; and (c) audit organisations notifying the
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
95
relevant government body of breaches of the legislation
for enforcement purposes.
A negative licensing model is primarily reactive, rather
than proactive, in nature. This means that, generally,
enforcement action will not take place until after a
breach of the legislation has occurred. While this might
be acceptable in relation to lower risk activities, it
could be very costly in relation to higher risk activities
that pose a risk of transmitting blood-borne diseases. In
addition, many blood-borne diseases are asymptomatic in
nature, and after a period of time, it is very difficult
to trace the source of an infection. Thus, breaches of the
legislation could be difficult to trace, and very costly
for all concerned.
8.3.6 Assessment of Option 2
The negative licensing model provides a useful model in
establishing minimum criteria for infection control
practices for various categories of activities. The
ability of the model to separate activities according to
their risk profiles, and to establish higher “benchmarks”
for higher risk activities, also provides a better (and
more cost effective) model for reducing health risks.
This model could include mandatory infection control
training for higher risk operators, with an obligation
being placed on business proprietors to ensure that
employees undertaking higher risk procedures are trained
in appropriate infection control procedures. This
approach would provide a higher level of public health
protection than either the Base Case or Options 1 or 4.
However the imposition of mandatory requirements as
described above would increase the social cost of the
model in line with Option 3 (the two-tier model), without
necessarily providing a similar level of reduction in
serious health risks (ie from blood-borne diseases) as is
available under Option 3.
The major drawback of the negative licensing approach is
that it is primarily reactive in nature. This drawback is
particularly significant in relation to higher risk
activities, which carry the risk of transmitting blood-
borne diseases. The introduction of random
audits/investigations would mitigate this risk, however
this is unlikely to occur in the absence of
licensing/registration fees or other cost-recovery
mechanism for enforcement agencies.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
96
Depending on the structure of the legislative model, the
costs of implementing Option 2 are likely to be similar to
Option 3 (the two-tier model), without a similar level of
confidence in the level of risk reduction from higher-risk
activities.
Only four of the 75 submissions to the review supported
this Option, however one of those four also supported
Option 3.
8.4 OPTION 3: TWO-TIER MODEL
Under the two-tiered approach of Option 3, activities that
give risk to the more serious public health risks are
dealt with in a different manner to those that pose less
serious risks.
When assessing the level of risks posed by various
hairdressing, beauty therapy and skin penetration
activities, the Risk Assessment Report concluded that
activities that are blood-letting in nature pose a higher
risk than activities that are not blood-letting in nature.
Option 3 therefore takes a tiered approach in recognition
of the different levels of risks posed by various
activities.
Under Option 3, the elements of a licensing system (for
higher risk services) are combined with those of a
negative licensing system (for lower/moderate risk
services). An illustration of this approach is contained
in Table 8.1
Table 8.1: Example of Requirements under a Two-Tier
Model
Higher Risk Activities Low/Moderate Risk Activities
Licence required No licence required
Mandatory infection control
training for operators
Infection control training
recommended, but not mandatory
Licence conditional upon
provision and maintenance of an
environment that facilitates
appropriate infection control
practices
Services to be provided in an
environment that facilitates
appropriate infection control
practices
Operators/owners must comply with
prescribed infection control
standards
Operators/owners must comply with
prescribed infection control
standards
Source: Queensland Health, 1999
The purpose of licensing under this Option is not to limit
numbers of providers or otherwise impede competition, but
to reduce public health risks.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
97
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
98
8.4.1 Business versus Individual Licensing under the Two-
Tier Model
The Risk Assessment Report concluded that the most
effective means of minimizing the risks to the public from
blood borne virus infections would be to ensure that all
persons involved in higher risk (ie skin penetration)
activities have undergone a course of
instruction/certification in infection control practices.
Under the two-tier model, this could be achieved under
either a business licensing or individual licensing
approach. These two approaches are considered below.
8.4.1.1 Individual Licensing
Individual licensing under Option 3 would require all high
risk service providers to hold a licence. This would
allow government enforcement agencies to maintain a record
of these providers, however such records may not translate
into an improved ability to track individual operators for
audit/ inspection purposes, as the mobility of operators
will act as an impediment.
The cost implications of imposing licensing requirements
on individuals would be higher than the cost implications
of imposing licensing requirements on businesses, since
there are significantly more individual operators than
businesses providing higher risk services.
An individual licensing approach would particularly affect
part time operators, who are less able to bear the
additional costs of obtaining a licence.
In addition, the larger number of individual licences
would create additional work and financial imposts on
government enforcement agencies, which currently focus on
business premises.
Other enforcement issues may work against the concept of
individual licensing. For example, if an audit uncovers a
problem with sterilising equipment at a business where a
number of individuals are working, the issue would arise
as to which individual (or all of them) would be held
responsible for the defective equipment?
A further disadvantage of individual licensing is the lack
of protection available to employees in circumstances
where business owners may exert pressure on employees to
provide services without taking appropriate infection
control precautions, for example, to provide services with
unsterilised equipment. A business licensing approach, by
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
99
contrast, would place statutory obligations on business
proprietors to facilitate infection control practices.
Thus there appears to be little argument to support the
imposition of individual licensing, as this would impose
additional costs and administrative complexities, with
little or no additional benefit to the public.
8.4.1.2 Business Licensing
Under a business licensing approach, the legislation could
still mandate infection control training for all
individuals providing high risk services, and could also
require business owners to ensure that persons who provide
higher risk services within their business have the
required infection control training.
Under a business licensing approach, the business owner
would also be responsible for ensuring that he/she
maintains a business environment that facilitates the
conduct of appropriate infection control practices.
However, the consultancy team believes that environmental
requirements should not be prescribed in the legislation,
as this would limit/remove the potential for business
proprietors to exercise initiative and innovation, and
would thus limit/reduce potential benefits under this
model.
It is anticipated that licence fees would be applied to
businesses providing high risk services, and that the fee
would cover administrative costs associated with the
licence, plus the costs of an initial inspection and
annual infection control audit of the business. The
variable costs (eg. additional inspection/audit fees)
would be recovered on a “user pays” basis, with business
owners being responsible for any additional
inspection/audit costs required as a result of non-
compliance with the legislation.
In the case of businesses that sub-lease space for other
providers (eg. tattooists), the principal business owner
would remain responsible for ensuring that each provider
has the appropriate infection control training, and is
able to comply with prescribed infection control
standards.
The consultancy team recommends that, if Option 3 is
adopted, businesses with multiple locations should pay a
single business licence fee, rather than a licence fee for
each location, which would make the model expensive and
unwieldy from a commercial viewpoint. It is considered
critical that the issuing of a business licence covers all
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
100
locations of a particular business and does not impose
unnecessary duplication of charges on business
proprietors. If this occurs, the model would be no
different to a premise based model plus infection control
training for high risk service providers.
A business licensing approach would provide clarity as to
who is responsible for audit/inspection fees, a
significant improvement over an individual licensing
approach. Further, it should provide regulatory bodies
with details of business locations where high-risk
services are performed. This will facilitate monitoring of
activities within those businesses.
The application of business licensing (rather than
individual licensing) is expected to provide a marginal
cost saving to service providers over all, since it would
affect a lower number of providers.
In conclusion, a business licensing approach is supported
in preference to an individual licensing approach, and is
used when considering the impacts of the two-tier model
(below).
8.4.2 Public Health Impacts
As noted earlier, it is considered that effective control
of infectious diseases/conditions from higher risk
activities justifies a level of legislation that will
influence operator knowledge and skill in infection
control practices.
The two-tier model (Option 3) specifically targets
activities according to their level of risk, and would
mandate infection control training and associated
requirements for higher risk services. Option 3 provides
a proactive and cost-effective means of reducing public
health risks.
The two-tier model addresses the legislative weaknesses
outlined under the Base Case. It remedies the existing
legislation‟s inability to address infection control
training, and is also an improvement on the negative
licensing model (Option 2). Option 3 is expected to
deliver better public health outcomes than Option 2 or
Option 4, and significantly better outcomes than Option 1
(no regulation).
Assuming a $200,00082 annual regulation administration and
maintenance budget and no income, the reduction in the
82 Estimates costs may be marginally higher than the existing regulatory for
skin penetration premises, which is estimated at $160,000 based on current
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
101
number of infections from HIV alone would need to be
marginally greater than 2 cases per annum to make the
proposed system cost-effective. In reality, however,
income will be generated from the licensing of higher risk
activities, which in turn will reduce the break-even risk
reduction to less than 2 cases per annum.83
In view of the projected improvement in reducing disease
under this model, and disease cost-savings at a maximum
value of $32 million annually, it is considered that this
option would generate the most-cost effective means to
minimise public health risks.
8.4.2.1 Risks of Licensing
One public health risk associated with any form of
licensing (but particularly associated with individual
licensing) is the potential de facto legitimisation of
practitioners who could use the term „licensed‟ to imply
some form of government sanction. This may provide
consumers with an inappropriate level of confidence in
selecting a supplier.
charges. For the purposes of this study, a 25% premium on existing costs has
been assumed. 83 Assuming an annual HIV cost of $93,000 per case. Should a human capital cost
approach be used, the breakeven number of cases would be less than 1.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
102
However, it should be noted that this issue is no
different from the current legislation (Base Case), under
which a licensed or registered business owner could imply
that the premise-based licence is a form of sanction for
the qualifications of the operator.
8.4.3 Impacts on Service Providers
8.4.3.1 Compliance costs
Under the Base Case legislation, the costs of complying
with premises requirements are estimated to be between
$5,000 and $15,000 per premises at the time of
establishment,84 plus the standard annual licence fee, and
ongoing costs of compliance with legislative requirements.
Under Option 3 (the two-tier model), businesses that
provide no, lower and moderate risk services would not be
required to be licensed and would not be required to meet
specified premises requirements. These businesses would
still be required to comply with appropriate infection
control practices, but it is expected that compliance
costs for these businesses would be significantly reduced.
Businesses providing higher risk services, however, could
face similar compliance costs to those currently existing
under the base case. These businesses would still be
required to hold a licence, and would still be required to
provide an appropriate environment to permit proper
infection control practices. However, these costs are
expected to be lower than a more prescriptive premises-
based model, and should allow business owners to be
flexible and innovative in generating an environment that
facilitates appropriate infection control.
New costs associated with training would apply for
persons/businesses undertaking higher-risk activities,
since operators would be required to undergo basic and
refresher training courses in relation to infection
control, and business owners would also be obliged to
ensure that their operators have the required training.
Training costs would impact on both existing and potential
service providers.
84 Industry estimates for fit-out costs to comply with the existing legislation
was approximately $5000 for a hairdressing/beauty therapy business and up to
$15000 for a skin penetrating business.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
103
However, costs associated with training requirements could
be minimised if infection control training is incorporated
into generic training courses, where such courses exist
(eg. beauty therapy). Costs could also be reduced if some
allowance is made for the certification of existing higher
risk practitioners (eg. body piercers, tattooists) on the
basis of their current infection control knowledge.
Industry bodies could assist this process by working with
Queensland Health and the Department of Employment,
Training and Industrial Relations to identify and register
courses that would meet appropriate infection control
standards and to develop bridging mechanisms to assist
existing participants migrate to the new standards.
Despite the apparent additional costs to higher risk
service providers, more submissions supported the two-tier
model in comparison to support for other models.
8.4.3.2 Restrictions on competitive conduct
Other than the licensing requirement for higher risk
businesses, and a requirement for operators to have
appropriate infection control training, Option 3 (two-tier
model) would not contain any restrictions on competition.
The proposed model would not limit the provision of
particular services, eg. mobile services. Rather, it will
focus on the risk of the activity and the process for
implementing appropriate infection control policies and
procedures to minimise infection risks from that activity.
For higher risk businesses, the licensing criteria may
include some environmental requirements.
8.4.3.3 Employment and Training Impacts
Employment opportunities for mobile operators would be
increased under Option 3, particularly for low/moderate
risk service providers who would not be required to comply
with any building requirements.
Service providers in fixed business locations may be
concerned that increased competition from mobile operators
could affect their own employment prospects. However, any
adverse impact on providers in fixed business locations is
likely to be more than offset by increased employment
opportunities in the mobile sector. In addition, given the
small segment of the market which currently uses mobile
operators, and the many different factors influencing
consumers in their choice of provider (eg. quality,
reputation, location), such impact is expected to be quite
marginal.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
104
Under Option 3, the following training requirements are
expected to apply:
All persons undertaking higher-risk activities must
undertake infection control training or
certification
Business proprietors must ensure that all persons who
undertake higher risk services within their
business have the required infection control
training/certification.
Thus, infection control training requirements would not
impact on all participants in the hairdressing, beauty
therapy and skin penetration industries. For example,
infection training will be mandatory only for operators
who undertake higher risk (ie skin-penetrating)
activities, not for those who provide low/moderate risk
services. Based on the current (estimated) number of
service providers who undertake skin penetrating
activities, and current accredited training levels
completed, it is expected that training requirements could
affect between 400 and 1,500 individuals throughout
Queensland.85
It is possible (but not probable) that some higher risk
operators could drop out of employment as a result of
these training requirements. This is more likely to
happen if the operator is a part-time employee and if the
cost of training does not outweigh the „perceived‟
benefits. It should be noted however, that training costs
are unlikely to be significant in isolation, and (as
discussed above), may be included as a module in standard
training courses.
There does not appear to be any evidence of significant
part-time employment within the „core‟ skin penetration
industries (eg. tattoo/body piercing). However, the
increasing prevalence of non-core businesses (eg. beauty
therapists) providing skin penetration services, and the
higher potential for beauty therapists to work part-time,
suggests that this impact may be greater in the non-core
skin penetrating service areas. However, in the absence of
available quantitative data and industry advice that
direct part-time service provision is not significant, it
is unlikely that this impact would be significant.
It is envisaged that Queensland Health, in consultation
with DETIR and industry bodies, will work towards
85 Estimate based on current accredited training levels completed and the
estimated number of service providers in skin penetrating activities.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
105
accrediting infection control training courses, including
those provided within national competency standards
training (eg. beauty therapy).
A significant benefit to be gained from the infection
control training requirement under Option 3 is the
improvement in skill levels within the affected
industries, and improved employability of operators who
have undertaken such training.
Additionally, as noted under Section 8.4.2 dealing with
public health impacts, such training is considered to be
the most effective means of reducing public health risks.
8.4.4 Impacts on Consumers
8.4.4.1 Consumer Protection
Consumer protection under the two-tier model would occur
in five (5) primary ways:
All businesses and operators would be required to
comply with standard infection control guidelines/code
of practice;
Businesses that provide higher risk services must hold
a licence based on relevant infection control criteria;
All persons who undertake higher risk procedures must
have recognised infection control
training/certification;
Regulatory agencies will monitor and enforce the
legislation, both proactively and reactively; and
Consumers can notify enforcement agencies if they
believe a business is not complying with infection
control requirements, and will also have the usual
common law remedies if they suffer damages as a result
of a hairdressing, beauty therapy or skin penetration
service.
It is considered that the two-tier model of Option 3 could
provide a higher level of protection from the risks of
infectious conditions/diseases than the Base Case, a
higher level than either Option 1 or Option 4, and a
similar level of protection to Option 5.
When compared with Option 2, Option 3 would provide a
similar level of protection for lower/moderate risk
activities, and a higher level of protection for higher
risk activities.
8.4.4.2 Consumer Costs/Savings
Under the two-tier model, there is likely to be some
reduction in the cost structure of businesses that provide
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
106
low/moderate risk services, since a negative licensing
framework will apply to those businesses. These cost
savings to business could be passed on to consumers,
however the rate of flow-on reductions may be dependent on
the concentration of suppliers and level of price
competition between participants.
The imposition of infection control training requirements
on higher risk operators may create a marginal increase in
the costs of services for higher risk activities; however,
such costs could be reduced if infection control training
is incorporated within existing generic training courses
(eg. beauty therapy). Moreover, as previously noted,
higher risk (skin penetrating) services do not appear to
be price-sensitive, with consumers generally choosing a
provider on the basis of perceived quality and type of
service rather than on price.
As previously noted, the two tier model appears to be the
most effective method for reducing the risk to consumers
of infectious conditions/diseases from hairdressing,
beauty therapy and skin penetration services. With the
costs of disease ranging between $8 million and $32
million,86 and an estimated regulatory cost of $200,000,
87
the potential benefits to consumers far outweigh the
costs.
8.4.4.3 Consumer Choice and Access
As noted under Option 2, restrictions on the conduct of
mobile operators would have significant impacts on service
access by rural and remote communities, the disabled, the
infirm, the aged and those that lack transport.
Under the two-tiered model, there would be no restriction
on the provision of lower and moderate risk activities by
mobile service providers. This would enhance consumer
access and choice in relation to hairdressing and the many
beauty therapy services that fall within the
lower/moderate risk classification.
Some level of restriction may still exist in relation to
higher risk services activities, although it is possible
that a business wishing to provide higher risk services
from a mobile van or similar could meet the necessary
licensing criteria, including BCA requirements.
86 Refer to Appendix E for details on calculations.
87 Estimates costs may be marginally higher than the existing regulatory for
skin penetration premises, which is estimated at $160,000 based on current
charges. For the purposes of this study, a 25% premium on existing costs
has been assumed.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
107
If mobile provision of higher risk services does occur, it
is considered unlikely that disabled, infirm, or aged
persons would be significant users of high risk services
(eg. tattoo, body piercing). However, the provision of
mobile high risk services would improve consumer access to
such services in rural and remote areas, as well as to
those who lack transport to business centres and to those
who may simply prefer a mobile service.
Therefore, consumers are likely to derive a higher benefit
under Option 3 than under the Base Case or under Options 4
or 5.
8.4.5 Impacts on Regulators
8.4.5.1 Costs
Under a two-tier model, licence fees will only be payable
by higher-risk participants, thus potentially leaving a
cost-recovery void for regulatory agencies in respect of
lower/moderate risk service providers.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
108
However, this issue could be addressed by the imposition
of “fee for service” charges, ie. by regulatory agencies
charging businesses a fee when an inspection is
undertaken. This would address current industry concerns
that licence fees are often “money paid for nothing”.
An annual inspection could be a “standard” charge for
business proprietors, with any additional inspections
charged only if a compliance notice is issued because of
legislative infringements. Since the new legislation will
have appropriate review/appeals mechanisms built in, this
should alleviate industry concerns that all inspections
may result in a compliance notice simply to enable the
regulatory agency to charge an inspection fee.
This approach would (a) encourage enforcement agencies to
undertake at least an annual inspection of businesses in
their area, and (b) encourage service providers to
maintain legislative compliance in order to avoid further
inspection charges during the year.
This approach would also ensure that regulatory agencies
are reasonably compensated:
(a) by licence fees for the costs of administering a
licensing system for higher risk businesses; and
(b) by inspection fees for their inspection activities
8.4.5.2 Ease of Administration
Under Option 3, regulatory agencies would have a similar
level of regulatory control as under the existing
legislation in respect of higher-risk service providers,
but not in respect of lower and moderate risk service
providers (who would not be required to be licensed under
this model). This may create some difficulties for
regulatory agencies in locating „problem‟ operators in the
lower/moderate risk categories. Nevertheless, given the
low level of identified complaints and prosecutions under
the existing legislation, it is unlikely that this risk is
significant.
Furthermore, the charging of inspection fees on a „user
pays‟ basis, will ensure that businesses have a market
based incentive to comply with the legislation and to
minimise the level of inspections undertaken.
8.4.6 Assessment of Option 3
The two-tier model, which combines the elements of a
negative licensing approach for low/moderate risk services
with a licensing approach for higher risk services,
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
109
provides a substantial improvement over the existing
legislation, which requires all business premises to be
licensed/registered, regardless of the level of risk they
pose.
By segmenting activities according to their risk
categories, and placing a higher level of regulatory
controls over higher risk services, the two-tier model
increases consumer protection from blood-borne diseases
and reduces the net costs to society from those diseases.
Similarly, the two-tier model reduces compliance costs for
lower/moderate risk services, while compliance costs for
higher risk services are maintained at a similar level to
those imposed under the current legislation. Training
costs for operators may be an additional factor in this
regard, but are not expected to be significant, and are
justified to secure the net benefits to society in terms
of disease reduction.
Finally, the imposition of licensing fees will offset the
need to maintain enforcement agency capacity and the
introduction of a user pays based inspection/audit system
will provide a market based incentive for businesses to
maintain satisfactory infection control practices.
Option 3 received the highest level of support from
submissions to the review (30/75), significantly higher
than any other Option.
8.5 OPTION 4: PREMISES LICENSING PLUS CODE OF PRACTICE
Under this approach, as under the Base Case, all business
premises where hairdressing, beauty therapy and skin
penetration services are provided would have to be
licensed. In addition, operators would also be required to
comply with guidelines or a code of practice. As with the
Base Case, mobile hairdressing/beauty therapy operators
would also be required to have licensed mobile premises,
while mobile skin penetrating operators would not be
allowed. There may also be restrictions as to who can
provide/receive services.
8.5.1 Legislative Coverage
The focus of Option 4 is on industries rather than
activities that generate risks. As a result, all market
participants would be subject to the same premise-based
requirements and potentially similar industry codes of
practice, irrespective of the activities (or mix of
activities) they undertake, and the risks they may pose.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
110
Option 4 fails to address the differences in risks
associated with the various activities and the changing
nature of the hairdressing, beauty therapy and skin
penetration industries. As with the existing legislation,
the ability of this model to evolve in response to ongoing
changes in service delivery will be limited.
Restrictions on mobile operators are likely to create a
greater incentive for mobile operators to go „underground‟
and operate illegally in order to meet the existing demand
for their services. This „dysfunctional‟ behavioural
incentive may create additional risks to community health.
However, this is unlikely to significantly different than
the situation under the current legislation, and could be
mitigated by enforcement bodies undertaking more proactive
monitoring and enforcement activities.
8.5.2 Public Health Impacts
Under Option 4, the requirement for all business premises
to be licensed is unlikely to have any significant impact
on the reduction of infectious diseases/conditions. As
noted in the Risk Assessment Report, there is a lack of
evidence of any causal relationship between premises and
disease transmission (however it is acknowledged that
premises may facilitate the implementation of appropriate
infection control practices88.
This option requires all business premises to be licensed,
regardless of the level or risk they pose. Given the
different levels of risk associated with various
hairdressing, beauty therapy and skin penetration
activities, it is unlikely that Option 4 would yield a
more cost-effective reduction in disease costs than either
the Base Case, or Options 1 or 5.
The effectiveness of this model would be dependent on the
infection control requirements contained in any proposed
guidelines or code of practice.
Any guidelines or codes which focus on premises
requirements alone are unlikely to prove effective in
terms of public health risk reduction, since this does not
address the key issue of operator training, knowledge and
skill in infection control practices. However, the
development of guidelines/codes that require adherence to
standard infection control practices may deliver a better
health outcome than the Base Case or Option 1.
88 The NHMRC and ANCA in the publication entitled „Infection Control in the
Health Care Setting‟ recognise some linkages between environmental surfaces
and disease transmission. Importantly, the environments under review in
this study are not health care settings.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
111
It is suggested that industry-based codes of practice
would be ineffective, due to the continual blurring of
service function between various industries. For example,
beauty therapists may also provide piercing/tattoo
services, while tattoo and piercing businesses may provide
both piercing and/or tattoo. Therefore, it is considered
that a single set of guidelines/code of practice for
infection control targeted at activities that give rise to
public health risks would be more effective in terms of
reducing infection risks.
8.5.3 Impacts on Service Providers
8.5.3.1 Compliance Costs
Under Option 4, premises requirements would be imposed on
all industry participants, as no distinction is made
between the risks associated with any activity.
As noted under the Base Case, the costs associated with
maintaining a premises to the standards specified in the
current legislation (or any proposed building code
requirements) are likely to be immaterial, given consumer
demand (preference) driven construction standards.
However, the imposition of prescriptive “premises”
requirements, with no additional (eg. public health)
benefit, is both inefficient and inappropriate. Further,
the building compliance requirements under this option
will only relate to those participants meeting the
industry definitions for hairdressing, beauty therapy or
skin penetration. As a result, the same competitive
disadvantages which occur under the existing legislation
(ie. Base Case) will remain under this model.
Prescriptive standards for premises would reduce the
flexibility of individual businesses and operators from
developing innovative and low cost solutions to infection
control requirements. For example, the outsourcing of
equipment sterilisation would be pointless if there was a
legislative requirement to have an autoclave in every
premise where skin penetrating activities occur. This
could impose an inefficient level of compliance costs on
service providers.
Depending on the details of building requirements and the
codes of practice, the actual costs of compliance under
this model is expected to be similar to or greater than
the costs incurred under the Base Case. Compliance costs
associated with infection control standards will be in
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
112
addition to the existing annual licensing costs, which
range upwards of $442,000.89
Thus (depending on the premises standards and the content
of the proposed codes under this model), the compliance
costs of Option 4 could be at least as much as (and
potentially higher than) the compliance costs incurred
under the Base Case and Option 3.
8.5.3.2 Restrictions on Competitive Conduct
Under Option 4, there would continue to be restrictions
(as with the Base Case) on mobile hairdressing and beauty
therapy operators, who would be required to have a
„licensed‟ establishment. In addition, as outlined in the
Queensland Health Discussion Paper, September 1998,
tattooists and body piercers would not be allowed to
provide mobile services under this model (as is the case
under the existing legislation).
This model could also include restrictions as to whom
services could be provided to (e.g. only allowed to
provide services to the aged and infirm).
89 Combined licensing costs under the existing legislation, ie $282,000 for
hairdressing/beauty therapy premises and $160,000 for skin penetrating premises
(see section 7.1.15).
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
113
These proposed restrictions on mobile operators would have
the impact of reducing potential market opportunities
available to operators in these markets. Such
restrictions are not justified on grounds of public health
risk since, (as noted in the Risk Assessment Report),
there is no evidence linking premises as a causal factor
in infectious conditions/diseases.
Some industry participants in “fixed” business premises
may support restrictions on mobile service provision;
however, as noted in the discussion of the Base Case, such
support is more likely to based on restricting competition
than on public health grounds.
The application of industry codes of practice under Option
4 could engender some competition-based disadvantages.
For example, an industry-based code of practice would
apply only to those providers who are captured by the
definition of the industry, but would not apply to those
providers who are not captured by the definition but
nevertheless provide similar services. For example, an
industry based code of practice for beauty therapists
would apply only to those who fall within the definition
of beauty therapists. It may not apply to those providers
who are not beauty therapists as defined, but who
nevertheless provide services that may be similar to those
provided by beauty therapists (eg. department store
assistants who demonstrate/apply cosmetics).
This could place some industry participants at a
competitive disadvantage, and is a key reason why
activity-based legislation (as per options 2 or 3) is
preferred to industry-based legislation.
8.5.3.3 Employment and Training Impacts
As noted in the section above, Option 4 (in comparison to
Options 1,2 and 3) imposes significant impediments to the
market-place development of mobile service providers,
without taking into account the level of risk associated
with the services they provide.
At present, there are approximately 270 registered mobile
providers and an unknown number of unregistered, “back
yard” or “black market” providers. These operators are
most likely to be sole operators, and under current
circumstances would be unlikely and/or unable to employ
other operators.90
90 Queensland Health Discussion Paper – Review of Hairdressing, Beauty Therapy
and Skin Penetration Legislation, 1998.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
114
The continuance of current restrictions on mobile
operators, or the imposition of new restrictions, could
affect the continued employment of some registered and
most unregistered providers. Moreover, the continuance of
restrictions on mobile operators would restrict any
employment growth in those service areas, and may act as a
barrier to existing businesses “branching out” into mobile
service provision.
Option 4 does not provide any training opportunities for
current participants or potential new participants, and
does not add to skill levels within the various
industries.
8.5.4 Impacts on Consumers
8.5.4.1 Consumer Protection
The level of consumer protection under Option 4 may be
marginally higher than the Base Case, depending on the
effectiveness of the code or codes of practice to be
developed. However, it is unlikely to be as high as the
level of protection available under Option 3 or 5, since
it does not include infection control training
requirements, and captures only industries, rather than
activities.
Under this model, as with other models except Option 1,
statutory penalties would apply to business owners who
breach the legislation. In addition, as with all other
models, common law remedies would be available to
consumers, and complaints could be made to enforcement
agencies about providers who breach the legislative
requirements.
8.5.4.2 Consumer Costs/Savings
There are unlikely to be any compliance savings passed
from service providers to consumers under Option 4, since
compliance costs to service providers are expected to be
similar to (or marginally higher than) the Base Case,
Furthermore, based on the conclusions of the Risk
Assessment Report, it is questionable whether premises
licensing can deliver any tangible benefits to consumers
in the form of lower infection risks
8.5.4.3 Consumer Choice and Access
The restrictions on mobile operators proposed under Option
4 would limit consumer choice and access to hairdressing,
beauty therapy and skin penetration services, without any
corresponding benefits in the form of lower risk. This
impacts particularly on rural and remote areas, as well as
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
115
on those who lack transport or who may simply prefer to
receive a mobile service. This indicates that Option 4
does not provide the optimal result for consumers
8.5.5 Impacts on Regulators
8.5.5.1 Costs
Under Option 4, the administrative, monitoring and
enforcement costs to regulators are likely to be the same
as those under the Base Case (ie, the existing
legislation).
Regulatory agencies would collect licence fees from those
participants who apply for licences, and would conduct
inspections/audits (both proactive and reactive) in the
same manner as the Base Case.
8.5.5.2 Ease of Administration
Option 4 retains a key advantage of the existing
legislation in providing an immediate record of businesses
providing hairdressing, beauty therapy and skin
penetration activities and the location of those
businesses. However, this does not capture those providers
who elect to provide services illegally, ie as “backyard”,
or unregistered operators.
8.5.6 Assessment of Option 4
Under this model, the potential cost to the community from
the existence of infectious diseases is unlikely to be
significantly different to that of the current regulatory
system (ie the Base Case).
The restrictions placed upon competition under Option 4
reduce market participation as well as consumer choice and
access, and do not appear to be based on the risks
associated with the provision of various activities.
This model is unlikely to be as cost effective as Options
2 or 3, as it does not address the differences in risk
levels associated with the different activities provided
within the hairdressing, beauty therapy and skin
penetration industries.
Only seven submissions (from a total of 75) supported
Option 4.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
116
8.6 OPTION 5: PREMISE LICENSING PLUS LICENSING OF INDIVIDUAL OPERATORS
This model is a variation of Option 4 (premises licence
plus code of conduct), with the additional impost of
licensing each individual operator. The benefits and
disadvantages associated with operator licensing were
discussed under Option 3, and this model does not appear
to impose any additional requirements. The relative
advantages of this model are summarised in Table 8.1 and
the costs and benefits are shown at Appendix C.
8.6.1 Legislative Coverage
In line with Option 4, this model focuses on the
industries affected rather than the activities that
generate disease risks. Furthermore, the imposition of
restrictions on mobile operators would result in Option 5
having the same problems as Option 4.
Therefore it is possible that coverage under this
legislation will be less than that identified for Option
3, unless the industry definitions contained in the
legislation capture all the current and potential
activities that may be undertaken in those industries.
8.6.2 Public Health Impacts
Under this model, which would be likely to include
infection control training in the criteria for individual
licences, it would be possible to reduce the disease costs
associated with infectious diseases/conditions to a level
comparable with that for both Options 2 and 3. This model
could therefore be equally effective (albeit, not as cost-
effective) as Option 3 in reducing infection risks arising
from hairdressing, beauty therapy and skin penetration
activities (provided mandatory infection control training
for individuals is imposed as part of the licensing
conditions).
This model, like Option 4, does not address the different
risk categories of the various services, and imposes the
same level of regulation (including “premises”
requirements) on all providers, regardless of the level of
risk posed by the services they provide.
Thus, while Option 5 may be as effective as Option 3 in
reducing public health risks, it is not as cost effective
as Option 3.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
117
8.6.3 Impacts on Service Providers
8.6.3.1 Compliance Costs
As noted earlier, the imposition of premises licensing,
codes of practice and individual licensing under Option 5
duplicates the benefits that can be achieved through a
significantly less prescriptive regulatory model.
It is unlikely that compliance costs under this model will
be lower than those costs imposed by the other four
options, and is likely to be significantly greater than
the existing annual licensing cost of $442,000,91 when the
additional costs associated with individual licences and
training requirements are factored in.
Option 5 (as with the Base Case and Option 4), imposes
requirements on all service providers, regardless of the
level of risk they pose. This Option therefore imposes
unnecessary compliance costs on service providers of no,
lower and moderate risk services.
This model would impose the highest compliance costs on
service providers in comparison to the other models
discussed.
8.6.3.2 Restrictions on Competitive Conduct
Option 5 does not improve or change the limitations on
competitive conduct identified for the Base Case or Option
4. The potentially tighter restrictions on mobile service
providers introduced in Option 4 and Option 5 compromises
the extent to which industry participants can
differentiate their services through innovation and
flexibility.
8.6.3.3 Employment and Training Impacts
Option 5 could encourage infection control training within
the affected industries, however the imposition of
individual licensing fees on all operators would increase
overall costs to individuals. Thus, Option 5 could
discourage people (particularly part-time workers) from
undertaking training in order to enter the market.
Option 5 may therefore provide the most significant
adverse employment impacts of all Options considered.
91 Combined licensing costs under current legislation (see section 7.1.15).
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
118
8.6.4 Impacts on Consumers
8.6.4.1 Consumer Protection
As noted in the section dealing with public health risks,
infection risks to consumers would be more effectively
reduced under Option 5 than under the Base Case and
Options 1 and 4.
Since mandatory infection control training could be
imposed under either Options 3 or 5, Option 5 is expected
to deliver the same degree of risk reduction as Option 3
(but would not be as cost effective as Option 3).
Under Option 5, as with Option 3, statutory penalties
would apply to service providers and business owners who
breach the legislation. Consumers could make complaints
or provide information to regulatory bodies if they
believed that a provider was not complying with the
legislation.
In addition, as with all other models, common law remedies
would be available to consumers who suffer damages as a
result of a hairdressing, beauty therapy or skin
penetration service.
8.6.4.2 Consumer Costs/Savings
Compliance costs under Option 5 are expected to be
significantly higher than any other Option, so providers
would have no scope to reduce service costs to consumers.
It is acknowledged that this model improves on the public
health and consumer protection outcomes identified for
Option 4, however it imposes additional costs without any
significant additional benefit when compared to Option 3.
For example, infection control training requirements can
be mandated under Option 3 without the need for individual
licensing.
Thus, it is considered that Option 5 imposes additional
costs on participants without any significant benefit to
consumers.
8.6.4.3 Consumer Choice and Access
Restrictions on mobile operators are expected to be
similar to those under Option 4, and would have similarly
significant impacts on service access by rural and remote
communities, the disabled, the infirm, the aged and those
who lack transport.
Option 5 limits consumer choice and access to services in
a similar manner to that of Option 4. These restrictions
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
119
on choice and access are without any corresponding
benefits in the form of lower risk, which indicates that
this model does not provide the optimal result for
consumers.
8.6.5 Impacts on Regulators
8.6.5.1 Costs to Regulators
Under Option 5, regulatory agencies would licence not only
all business premises where hairdressing, beauty therapy
and skin penetration services are provided, but would also
licence all individuals providing those services.
This would effectively more than double the licensing
burden of the existing legislation (Base Case), which
covers business premises only. Thus, regulators would
bear significant additional costs of administering this
model, in both the short- and long-term.
8.6.5.2 Ease of Administration
Option 5 retains the same advantages as Option 4 in
relation to premise locations and also has the added
advantage of being able to keep track of individuals
providing the services. As such, this model may be
marginally easier to administer than all other options
with the exception of Option 1. However, as noted in the
earlier discussion about the advantages/disadvantages of
individual licensing (see Section 8.4.1), such records may
not translate into an improved ability for regulatory
agencies to track individual operators for
audit/inspection purposes, as the mobility of operators
will act as an impediment.
8.6.6 Assessment of Option 5
Whilst it is acknowledged that this model will improve on
the public health outcomes identified for Option 4, it is
unlikely that it would be as cost-effective as Option 3.
The dual licensing requirements (ie for business premises
and for individual operators) would have significant cost
impacts for service providers, and would create a greater
regulatory burden for enforcement bodies. Nevertheless, it
is the only Option other than Option 3 that can meet the
primary objective of infection risk reduction.
This Option was not proposed in the Discussion Paper and
therefore did not receive any supporting submissions.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
120
8.7 Overall Assessment of Options
A comparative analysis of the impacts under each option
was undertaken in order to identify a “preferred option”.
The results of the analysis are summarised in Table 8.2,
which provides an indicative ranking of each Option‟s
ability to meet review criteria.
Option 1 (no regulation) is considered suitable only for
activities that generate no health risks.
Option 2 (negative licensing) is considered suitable for
activities that may generate low or moderate health risks,
but is not suitable for higher risk activities, ie skin
penetrating activities that potentially involve risks of
blood-borne diseases.
Option 4 (premises licensing plus Code of Conduct) imposes
restrictions and compliance costs on all service providers
regardless of the level of health risks they may pose. It
does not provide any net benefit to the public.
Option 5 (premises licensing plus individual licensing)
similarly imposes restrictions and compliance costs on all
service providers, without regard to the level of risk
they may pose. It is considered suitable for skin
penetrating activities that may carry high health risks,
but is the most costly of all options.
As shown in Table 8.2, Option 3 (two tier model) is the
“preferred option”.
Option 3 applies different levels of regulation according
to the level of health risks. It imposes no regulatory
requirements on activities that generate no risk; applies
negative licensing to activities that give rise to lower
and moderate risks, and requires businesses providing
higher risk services to be licensed on the basis of their
ability to meet specified infection control criteria.
Option 3 also mandates infection control training for
persons who provide higher risk services.
Licensing requirements are imposed on higher risk services
not to limit provider numbers or to otherwise impede
competition, but only to ensure that public health
infection risks are effectively reduced. There are no
proposed restrictions on the type of person or business
who/which can provide services, provided they meet the
prescribed infection control standards.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
121
Option 3, the preferred model, effectively meets the risk
minimisation objective, and maximises public health
benefits with the least impact on business activities.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
122
Table 8.2: Assessment of Impacts under each Option
IMPACT/BENEFIT OPTION 1
OPTION 2 OPTION 3 OPTION 4 OPTION 5 OPTION
PREFER-
ENCE
A PUBLIC HEALTH IMPACTS
Meets the objective of reducing
risks to the public from
infectious diseases/ conditions
1
2
5
1
5
Options
3,5
Reduces costs of disease
management
1 3 5 1 5
Deals with low/moderate risk
activities in most cost effective
manner
3 5 5 2 1 Option 2
Deals with higher risk activities
in most cost effective manner
1 3 5 2 4 Option 3
B IMPACTS ON PROVIDERS
Reduces compliance costs to
providers
5 4 3 2 1 Option 1
Removes restrictions on
competitive conduct
5 4 4 1 1 Option 1
Enhances training opportunities 1 5 5 1 5 Option 5
C IMPACTS ON CONSUMERS
Provides consumer protection from
infection risks
1 2 5 1 5 Options
3,5
Potential reduction in costs of
services to consumers ( flow-on
from cost savings to providers)
5 4 3 2 1 Option 1
Enhances consumer choice and
access
5 5 4 1 1 Options
1, 2
D IMPACTS ON REGULATORS
Reduces regulatory costs 5 2 4 4 3 Option 1
Ease of Administration 5 2 3 4 3 Option 1
TOTAL SCORE
38
41
51
22
35
Option 3
Rankings in the above Table are an indicative assessment of each option’s
ability to meet review criteria.
5 is the highest ranking, 1 is the lowest.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
123
9. Experience in Other Jurisdictions
Hairdressing has been, and remains subject to public
health regulation by most health authorities through the
application of premises‟ licensing or registrations and/or
regulations about health related standards.
Generally, skin penetration has not historically been the
subject of occupational regulation, or “operator” based
regulation, although it has been the subject of premises‟
regulation and legislation about health related standards.
Currently, the type and extent of the regulation of
hairdressing and skin penetration across the States and
Territories varies considerably. Some jurisdictions have
commenced, or will soon commence, NCP reviews of their
regulation of the hairdressing, beauty therapy and skin
penetration industries.
The ACT and Tasmania have recently enacted new public
health legislation with schemes for the regulation of
certain activities categorised as “public health risk
activities”. The legislation in these two States is
similar in that it addresses and regulates certain
activities (on a public health risk basis) rather than
businesses or occupations.
The ACT legislation provides that the Minister may, by
instrument, declare an activity and/or procedure to be a
public health risk activity, i.e. an activity that may
result in the transmission of disease, or that may
otherwise adversely affect the health of individuals in
the context of the wider health of the community. Any
such declaration must indicate whether the declared
activity or procedure is a licensable or non-licensable
activity or procedure.
Persons carrying on public health risk activities or
procedures must comply with a Code of Practice in relation
to that activity or procedure. (The legislation provides
that the Minister may establish Codes of Practice, setting
out minimum standards or guidelines).
Those public health risk activities or procedures which
have been declared to be licensable must not be undertaken
unless the person doing so holds an “activity licence” or
“procedure licence” in relation to the activity/procedure,
and must not be undertaken except in accordance with the
licence.
Decisions about the granting or refusal of an activity
licence must have regard to:
the suitability of premises for the activity;
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
124
the competence and experience of the applicant;
the adequacy of equipment to carry on or perform the
activity in accordance with any applicable Code of
Practice;
any previous contravention by the applicant;
the potential public health risks associated with the
activity; and
any other matters relevant to the interests of public
health.
Decisions about the granting or refusal of a “procedure
licence” are the same as those for an “activity licence”,
except there is no requirement in relation to the
suitability of premises, or in relation to the adequacy of
equipment.
In Tasmania, in determining an application for licence,
the competency of the applicant to undertake the activity
in accordance with any relevant guidelines must be
considered. If so declared by public notice, operators
may also have to register their premises. Separate
guidelines have been issued in respect of the activities
of ear and body piercing, tattooing, and acupuncture.
These require registration of premises with local
government, compliance with infection control measures and
related measures.
A brief summary of the regulatory arrangements in other
Australian jurisdictions is provided in Appendix D.
The findings of this report are consistent with the
movements towards a less prescriptive and restrictive
regulatory environment in other jurisdictions. The
preferred option (ie. Option 3, the two-tier model) is
consistent with recent Tasmanian and ACT legislation.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
125
10. Conclusions
10.1 Existing Legislation
Given the primary objective of the existing legislation is
to minimise the risk of infection from the activities
associated with the hairdressing, beauty therapy and skin
penetration industries, the primary benefit to the public
would arise from the cost-effective control of these
risks.
A primary finding of the risk assessment was the formal
recognition that different activities give rise to
different risks. Any legislation that intends to minimise
the risk associated with infectious conditions and
communicable diseases should therefore focus on the
processes/activities that give rise to those risks.
The profile of activities and risks outlined in this
report indicates that the major risks to public health lie
with blood borne diseases and therefore those activities
that are bloodletting in nature.
The premises of any given operator is not directly
relevant to preventing the transmission of infectious
conditions/communicable diseases. Premises do however,
act to facilitate practitioners to conduct good infection
control practices.
This outcome was reinforced in the cost benefit assessment
which found that there was unlikely to be a net public
benefit from the maintenance of the existing hairdressing,
beauty therapy and skin penetration legislation.
10.2 Reform Options
No net public benefit could be demonstrated with the
retention of the existing regulations. Furthermore, it
was found that the benefit to the community would be
greater under an alternative model. The assessment of the
reform options identified different strengths and
weaknesses in all models proposed and these are summarised
in Appendix C. The alternative associated with the
highest net public benefit is a model that is based upon a
two-tier regulatory system targeted at specific
hairdressing, beauty therapy and skin penetration
activities on the basis of infection risk.
The experience in other States has seen a growing emphasis
on developing a better model to address the risks
associated with the activities provided by the
hairdressing, beauty therapy and skin penetration
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
126
industries. Tasmania and the ACT have both adopted
approaches that seek to address different levels of
activity risk. These models appear to be consistent with
the findings of this report.
In addition, the preferred model also received the largest
proportion of support from the submissions to the project
(refer to Appendix A).
Overall, the PBT assessment concluded that Option 3 is the
most effective method of achieving the legislative
objective for the following reasons:
Removes barriers to competition imposed under the
existing and proposed premise based approaches;
Impedes competition only to the extent that businesses
undertaking higher risk (ie. skin penetrating)
activities must meet certain licensing criteria that
are clearly related to risk minimisation;
Addresses the factors implicated in the risks of
infection/communicable disease transmission (eg.
operator skill and knowledge);
Minimises the costs of disease to the community from
the activities undertaken in the hairdressing, beauty
therapy and skin penetration industries by recognising
that significantly higher personal, social and economic
costs arise from blood borne diseases than from other
infections;
Focuses on activities rather than industries, allowing
more effective targeting;
Addresses the weaknesses identified in the other
alternative models and/or provides the same level of
consumer protection more cost-effectively;
Clearly focuses on the roles of operators and business
proprietors in minimising the risks from communicable
diseases/infectious conditions;
Regulators are no worse off under this model as those
businesses requiring monitoring are liable to pay for
any audit/investigations undertaken; and
Instills a market incentive on participants to minimise
adverse behaviour by imposing costs of
investigations/audits on the non-compliant party.
Provides an effective level of protection to the public
from (a) Bloodborne diseases and conditions and (b)
Other infections by:
iii. Requiring businesses that provide higher risk
activities to be licensed according to specified
risk minimisation criteria, and by requiring persons
who provide higher risk services to have completed
approved infection control training or examination;
and
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
127
iv. Requiring all service providers (irrespective of
risk classification) to take reasonable steps to
minimise the risks of infections/communicable
diseases.
Finally, Option 3 also minimises the impacts on employment
within the affected industries and maximises access to
services by potentially disadvantaged groups (eg. infirm,
aged, rural and remote communities.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
A-1
Appendix A - Summary of Submissions
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
B-1
Appendix B - Legislative Extracts
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
C-1
Appendix C - Impact Statement Matrix
BASE CASE
(premises licensing)
OPTION 1
(no regulation)
OPTION 2
(negative licensing)
OPTION 3
(two-tier model)
OPTION 4
(premises licensing and
code of practice)
OPTION 5
Premises licensing and
individual licensing
Description of Option
All premises must be
licensed regardless of
level of risk
No legislation No licensing requirements
All service providers must
comply with infection
control standards
High risk s businesses must
be licensed
All high risk service
providers must have
infection control
training/certification
All service providers
(regardless of risk) must
comply with infection
control standards
Same as Base Case plus
Code of Practice applies to
all operators regardless of
risk level
All premises must be
licensed regardless of risk
level
All individual operators
must be licensed regardless
of risk level
PUBLIC HEALTH IMPACTS
Reduces Public Health
Risks
(ie, meets risk
minimisation objective of
the legislation)
No -
Does not address key
factors needed to reduce
infection risk( (infection
control standards &
training) - however it may
encourage some
precautionary measures (eg.
sterilisation of equipment)
No -
Does not address key
factors needed to reduce
infection risks
.
Partially -
Could be effective in
respect of low/moderate
risk activities, but may
not effectively minimise
risks of blood-borne
diseases from high risk
activities
Yes -
Incorporates the key
factors needed to minimise
the risks of blood-borne
diseases and other
infectious conditions
No -
Does not incorporate the
key factors needed to
minimise infection risks,
particularly blood borne
diseases, ie infection
control training and skills
Yes –
provided infection control
training is the key
criteria for individual
licences
Reduces disease costs No -
Costs of treating disease
could range between $8m and
$32m
No -
Costs of treating disease
could range between $8m and
$32m
Costs may be marginally
higher than under Base
Case.
Could partially reduce
disease costs;
Costs should be less than
under Base Case.
Yes -
Costs of treating disease
should be significantly
less than under Base Case
No -
Costs of treating disease
could range between $8m and
$32m;
Costs may be less than
under Base Case
(depending on infection
control standards in code)
Yes –
Costs of treating disease
should be significantly
less than under Base Case
Cost Effective approach
to minimising risks and
disease costs
No
Imposes costs, regardless
of level of risks
No
Does not address infection
risks (and associated
costs) to the community
Yes, but may not
sufficiently reduce costs
of blood borne diseases
Yes
Addresses activities
according to level of risk
No
Imposes costs regardless of
level of risks
No
Imposes significant costs,
regardless of level of
risks
IMPACTS ON SERVICE
PROVIDERS
Compliance Costs Estimated at $442,000
(licensing costs of all
providers)
plus estimated additional
$5000-$15000 per location
for premises requirements
None Less than existing
licensing costs of $442,000
Lower costs for
low/moderate risk
activities;
And at least equal to the
existing licensing costs of
$160,000 for high risk (ie
skin penetrating)
activities
At least equal to the
existing licensing costs of
$442,000
In excess of existing
licensing costs of $442,000
Restrictions on
competitive conduct
Yes –
Restrictions on mobile
service providers
Restrictions on service
provision by/to persons
with infections
Inconsistent application of
No restrictions No restrictions Some restrictions –
High risk businesses would
be required to hold a
licence (based on infection
control criteria) and to
ensure that all high risk
service providers within
Yes –
Similar restrictions to
Base Case
Yes –
Similar restrictions to
Base Case plus additional
licensing requirements for
individual service
providers
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
C-2
BASE CASE
(premises licensing)
OPTION 1
(no regulation)
OPTION 2
(negative licensing)
OPTION 3
(two-tier model)
OPTION 4
(premises licensing and
code of practice)
OPTION 5
Premises licensing and
individual licensing
legislation (ie not applied
to some provider groups);
Some service providers
exempted from legislative
requirements
the business have infection
control
training/certification
No restrictions on mobile
service providers, or on
provision of services.
Employment impacts Restricts employment of
mobile service providers
No restrictions on mobile
operators –
this option is likely to
increase employment
opportunities for mobile
service providers, with no
net adverse effect on
service providers in
“fixed” business locations
No restrictions on mobile
operators –
this option is likely to
increase employment
opportunities for mobile
service providers, with no
net adverse effect on
service providers in
“fixed” business locations
No restrictions on mobile
operators –
This option is likely to
increase employment
opportunities for mobile
service providers, with no
net adverse effect on
service providers in
“fixed” business locations
Similar to Base Case Similar to Base Case, plus
additional negative impact
if licensing requirements
for individual operators
discourage participation in
the market
Training impacts No impact on training No impact on training May enhance training
opportunities for some
service providers
(depending on how the model
is developed)
Would enhance training
opportunities for high risk
service providers and
enhance workplace skills in
infection control
No impact on training If infection control
training is mandated in the
licensing criteria for
individuals under this
model, it could enhance
training opportunities and
enhance workplace skills
IMPACTS ON CONSUMERS
Consumer protection Does not effectively reduce
infection risks.
Regulatory bodies may
respond to consumer
complaints and/or
information.
Consumers have common law
rights.
Would not effectively
reduce infection risks.
Consumers would have common
law rights only.
Expected to partially
reduce infection risks.
Consumers would have same
rights as under Base Case.
Expected to significantly
reduce infection risks.
Consumers would have same
rights as under Base Case
Not expected to effectively
reduce risks from blood
borne diseases.
Consumers would have same
rights as under Base Case
Expected to significantly
reduce infection risks.
Consumers would have same
rights as under Base Case
Consumer costs/savings Consumers most likely bear
majority of compliance
costs imposed on providers
($442,000 for licence costs
alone)
Service costs to consumers
may fall since compliance
costs of providers would be
nil
Service costs to consumers
may fall since compliance
costs of providers would be
reduced
Costs to consumers for
no/lower/moderate risks may
be reduced;
Costs to consumers for high
risk services may be equal
to or marginally higher
than under Base Case
Costs to consumers expected
to be similar to those
under Base Case
Costs to consumers expected
to increase due to
significantly increased
compliance costs of service
providers
Consumer Choice & Access
to services
Consumer choice and access
limited due to:
Restrictions on mobile
services
Restrictions on provision
of services to people with
No restrictions on consumer
choice and access
No restrictions on consumer
choice and access
No restrictions on consumer
choice and access to
low/moderate risk services
Minor restrictions on
consumer choice and access
to high risk services
Same restrictions as Base
Case
Same restrictions as Base
Case
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
C-3
BASE CASE
(premises licensing)
OPTION 1
(no regulation)
OPTION 2
(negative licensing)
OPTION 3
(two-tier model)
OPTION 4
(premises licensing and
code of practice)
OPTION 5
Premises licensing and
individual licensing
infections
(providers must meet
licensing criteria)
IMPACTS ON REGULATORY
BODIES
Costs Revenue from licensing fees
of approx. $442,000
Licensing, monitoring and
enforcement costs
of approximately $442,000
Development and review of
legislation:
(Queensland Health)
approx. $500,000 for NCP
review costs alone
Loss of licensing revenue
of $442,000
Offset by no costs to
regulatory bodies for
licensing, monitoring,
enforcing legislation
No legislative review
costs
(savings of approx.
$500,000)
Loss of licensing revenue
of $442,000
Monitoring and enforcement
costs -
Less than Base Case
Legislative review costs -
less than $500,000 since no
NCP review needed
Loss of licensing revenue
from low/moderate risk
service providers, of
approximately $282,000
Revenue from licensing high
risk businesses approx.
$160,000.
Licensing, monitoring and
enforcement costs –
May be marginally higher
than Base Case
Legislatively review costs
of approximately $500,000
Licensing revenue similar
to Base Case
Licensing, ,monitoring and
enforcement costs similar
to Base Case
Legislative review costs
(including NCP review) of
approximately $500,000
Licensing revenue from
premises and individuals –
significantly higher than
Base Case
Licensing, monitoring and
enforcement costs (local
government) – significantly
higher than Base Case due
to dual licensing
Legislative review costs
(including NCP review)
of approx. $500,000
Ease of Administration No change Removal of legislative
requirements also removes
all administrative issues
May be more difficult to
administer due to lack of
data capture from licences
May be more difficult to
administer for low/moderate
risk services due to lack
of data capture from
licences
Same as Base Case Administration workload
expected to double, due to
dual licensing of premises
and all individual
operators
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
D-1
Appendix D - Experience in Other States
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
E-1
Appendix E - Disease Costing Calculations
It has been estimated that around 1,367,200 tattoo, body
piercing and acupuncture services are provided throughout
Queensland each year. This estimate has been based on the
number of registered service providers multiplied by the
average estimate of services provided by each operator
(business location).
Of these 1,367,200 services, it is estimated that only a
small percentage will result in the transmission of a
blood borne infection. In order to determine the
probability of infection due to equipment contamination
with blood from a previous client or operator, some
estimate of equipment contamination with blood from a
previous client or operator would be required. As a
result, the project has assumed a sensitivity range of
100% to 25% to reflect the probability of contamination of
the equipment. 92
It has also been assumed that the
probability of acquiring the disease following skin
penetration by equipment contaminated with virus infected
blood is 0.5% for HBV, 30% for HBV and 3% for HCV. 93
In addition, only a fraction of the persons receiving or
providing treatment will carry the diseases within the
general adult community. Prevalence rates within the
general community of 0.04% for HIV, 0.5% for HBV and 1.00%
for HCV were adopted in line with discussions with
Queensland Health.94 Whilst it is acknowledged that some
population groups have a higher prevalence than others
(eg. IDU), no data were available to identify the
different client groups within the affected industries.
Therefore, no allowance has been made for either an
increase or decrease to the general population prevalence
rate.
By multiplying the total services for each group with the
disease prevalence rates (ie. probability of person
carrying the disease), the probability of using blood
92 Probability range was prescribed by the Legislative Projects Unit and the
Communicable Diseases Unit of Queensland Health; 1999. 93 Germanaud J, Causse X, Dhumeaux D. Transmission of HCV by Accidental Needle
Stick Injuries Presse Medical 23 (23): 1078-82, 1994. “Risk of Transmission of
HCV 0-3% and may be up to 10% if patient (donor) is HCV RNA positive up HBV
risk 7-30%”. RACS Policy Document Infection Control in Surgery. Management of
AIDS (HIV) and Hepatitis B. February 1994 Appendix 11 pp14-16. C. Burrell;
Today‟s Life Science. October 1992, p12-16. “HBs Ag eAg pos 106-108 infectious
doses/ml”. Global Program on AIDS. Report of a WHO Consultation on the
Prevention of HIV and Hep B Virus Transmission in the Health Care Setting.
Geneva 11-12 April 1991 WHO p1. “HBV is found in very high titres (often>10x106
ID/ml) 7-30% risk of HBV infection after needle stick exposure. HIV is less
common the virus is present at concentrations of 10-100 ID/ml. <0.5% of HCW
sustaining a needle stick exposure to the blood of a HIV positive patient have
acquired HIV”. Ippolito G, Puro V, Petrosilla N, Pugliese G, Wispelwey
B,Tereskerz PM, Bentley M, Jagger N. Prevention Management of Occupational
Exposure to HIV. Advances in Exposure Prevention. University Virginia USA 1997
p12-13. Courier-Mail, February 3, 1999. 94 Communicable Diseases Unit, Queensland Health; 1999.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
E-2
contaminated equipment and the probability of contracting
the disease, it is estimated that a maximum of 2.73
persons could be potentially affected by HIV on an annual
basis. In a similar manner, the same process indicated
that 2,050.8 persons and 410.16 persons could be affected
annually by HBV and HCV respectively.
SKM ECONOMICS RE02006: Draft Final - NCP REPORT HEALTH ACT
1937 (HAIRDRESSING & SKIN
PENETRATION).DOC
E-3
Whilst this may result in up to 2,464 persons being
affected annually, not all infections will result in
mortality or chronic infections and the extent of
equipment contamination will be less than 100%. It has
been estimated, based on information obtained from the
AIHW and the SA Department of Human Services that HIV has
a 100% probability of chronic infection and mortality,
whilst HBV has a 10% probability of chronic infection and
25% probability of mortality (ie. a joint probability of
mortality of 2.5%) and HCV has a 75% probability of
chronic infection and a 10% chance of mortality (ie. a
joint probability of mortality of 7.5%) following
infection.
The costs of treating these diseases vary considerably. No
definitive estimate of cost could be identified and has
been inferred from multiple sources. For example, the
direct treatment costs of HIV was estimated to be $93,000,
95 while the costs for treating chronic and mortal (ie
death) HBV infections was assumed to be $2,230 and
$128,900 respectively.96 The cost for HCV was assumed to
be $48,728 for chronic infections and $62,599 for mortal
cases. 97
By multiplying the relative number of cases for each
disease group (separated into chronic and death
categories) by their relative cost assumptions, the total
costs of disease management (assuming a 100% probability
of equipment contamination) are as follows:
Cost of treating potential HIV infections $254,299.
Cost of treating potential HBV infections $11,067,655.
Cost of treating potential HCV infections $20,412,976.
Total Costs of Potential Infections $31,734,930.
95 Lifetime cost of human immunodeficiency virus-related health care – Susan
Hurley et al. Published in Journal of Acquired Immune Deficiency Syndrome Human
Retrovirology; August 1996:12(4)-Pp. 371-8 96 Disease Costs of Hepatitis B in Australia, 1993. Australian Institute of
Health and Welfare; 1994. 97 Schedule 1 Review of the Public Health Regulations; NSW Department of Health;
1994.